Hong Kong’s consumer prices rose at the fastest pace in 30 months last month as food and rental costs increased.
Inflation accelerated to 3.7 percent from a year earlier after gaining 3.6 percent in January, the government said on its Web site yesterday. The number compared with the 3.6 percent median estimate of 13 economists surveyed by Bloomberg News.
Rising commodity costs and capital inflows triggered by the strength of Asia’s recovery, and monetary easing in developed economies threaten fuel price gains across the region. Hong Kong Financial Secretary John Tsang (曾俊華) last month described inflation as one of the government’s two main challenges this year and forecast consumer prices could climb by 4.5 percent, almost double last year’s increase.
“Inflationary pressure in the economy is likely to increase in the coming months as global food and commodity prices remain elevated and the feed-through from the earlier rapid increases in private housing rentals continues,” the government said in yesterday’s release.
Average rents in Hong Kong for private housing increased 13 percent last month from a year earlier, Centaline Property Agency Ltd (中原地產), the city’s biggest privately held real-estate broker, said in a release yesterday.
Stocks rose in Hong Kong. The Hang Seng Index climbed 0.8 percent to 22,857.90, gaining for a third consecutive day, after Japan made progress in stabilizing a crippled nuclear plant and cement makers advanced on the prospect of higher demand.
Inflation is being “fueled by a spill-over impact from rising food prices in mainland China,” Donna Kwok (郭浩庄), a Hong Kong- based economist at HSBC Holdings PLC, said before yesterday’s data. “We expect excessively loose monetary conditions and wage inflation to continue stoking inflationary pressures.”
China’s food costs rose 11 percent from a year earlier last month, boosting prices in the city that sources much of its fresh food from China.
Hong Kong’s government, robbed of an independent interest-rate policy because of a -currency pegged to the US dollar, plans to sell as much as HK$10 billion (US$1.3 billion) of inflation-linked bonds to help residents cope with rising costs. Tsang announced the sale on Feb. 23 when he issued his annual budget that also earmarked an electricity subsidy and a waiver on property rates to ease the impact of inflation.
Such aid can distort inflation data, the government said yesterday. Excluding the impact of these measures, inflation was 3.6 percent last month compared with 3.5 percent in January, according to yesterday’s report.
The economy may expand by 4 percent to 5 percent this year, Tsang estimated last month.
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