Thursday, December 20, 2007

Hong Kong inflation predicted to go up

Inflation in HK already stands at 3.2 percent. It is predicted to rise further....

(XFN-ASIA) - Hong Kong's consumer inflation will probably edge up to 3.5 pct this month from the 3.4 pct recorded in November as demand for goods and services remains strong and as high food prices in the mainland continue to have an effect here, said Chen Peng, an economist at JPMorgan Chase.

'As the economy remains robust and with Christmas holidays-related spending, demand for goods and services is stronger this month compared to last month,' he said.

'Hong Kong imports the bulk of its fresh food requirements from China and the fact that food prices there remain at high levels means this will immediately be felt here,' he said.

'I expect consumer inflation this month at 3.5 pct, but this might fall to an average 3 pct in the first quarter next year as food prices in China stabilize and as the anticipated economic slowdown in the US affects Hong Kong,' Peng said.

The government announced today that Hong Kong's composite consumer price index (CPI) rose 3.4 pct in November from a year earlier, accelerating from the 3.2 pct growth recorded in October.