Inflation rose to 2.4% in January 2023 in Hong Kong

The annual inflation rate in Hong Kong rose to 2.4% in January 2023, accelerating from 2% in the previous month.

It was the highest increase in consumer prices since September, as costs rose faster for food (5% vs 3.8% in December) and electricity & utilities (20.6% vs 14.7%). Additional upward pressures came from clothing & footwear (5.8% vs 5.1%), miscellaneous goods (1% vs 0.5%) and services (2% vs 1.9%).

At the same time, the underlying inflation rate was also at 2.4%, 0.4 percentage points higher compared to December. On a monthly basis, consumer prices grew 0.6%, the largest growth since February 2022.

A government spokesman said that the year-on-year rise in inflation in January was due to the Lunar New Year coming earlier this year than last, and that a more effective assessment of underlying inflation would be made when the two are combined and analysed when February figures are available. At present, price pressures on key components are broadly contained, except for notable increases in the prices of food, energy-related items and clothing and footwear.

Even though there is rise on the inflation, Many investors remain optimistic about investing in Hong Kong. Looking ahead, the spokesman said that local cost pressures may rise as the economy recovers, while external price pressures are expected to moderate slightly.

Especially since full customs clearance between Hong Kong and the Mainland resumed on 6 February, with a total of about 280,000 arrivals and departures on the same day, and consumption in Hong Kong showed signs of recovery, with a general rise in Hong Kong consumer stocks. For the future market, with the resumption of customs clearance between Hong Kong and the Mainland, offline foot traffic in the Guangdong, Hong Kong and Macau Greater Bay Area is expected to revive, driving the recovery of the local dining, hotel, leisure and other consumption scenes.

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Above Article is from Trading Economics