11/21/2008 (3:38 am)
Hong Kong's Inflation Rate Slows on Lower Food, Energy Prices
Hong Kong's inflation slowed for a third month as commodity prices fell and the government waived public-housing rents and subsidized electricity bills.
Consumer prices rose 1.8 percent in October from a year earlier, the government said today on its Web site, after gaining 3 percent in September. That compared with the 1.9 percent median estimate of 14 economists surveyed by Bloomberg.
Inflation has eased from July's decade-high level of 6.3 percent because of smaller gains of food prices in China, Hong Kong's major supplier, and lower global energy prices. Hong Kong slipped into its first recession last quarter since the severe acute respiratory syndrome epidemic in 2003.
“Inflation has cooled on the back of lower food and energy prices,'' said Kelvin Lau, an economist at Standard Chartered Bank Plc in Hong Kong. “Looking ahead, inflation will continue on a downward trend along with the economic cycle.''
For the first 10 months, Hong Kong's consumer prices rose 4.6 percent from a year earlier, the government said.
Gross domestic product shrank 0.5 percent in the third quarter from the previous three months, as exports and domestic demand cooled.
In China, the world's fastest-growing major economy, consumer prices climbed 4 percent in October from a year earlier and food prices increased 8 fast cash in one hour.5 percent. Both were the least in 17 months.
Oil's Drop
Crude oil has fallen more than 40 percent this year, prompting utility companies and gas stations to cut prices. CLP Holdings Ltd., Hong Kong's biggest power supplier, lowered the average net electricity tariff by 3 percent on Oct. 1.
The government has subsidized household electricity by taking HK$300 off bills every month for one year starting September. It has also distributed food allowances for the poor and waived rents for public-housing residents for three months starting August.
Food prices rose 9.4 percent in October from a year earlier, the government said. Utility costs slumped 32.3 percent and rents slipped 0.8 percent.
“Looking ahead, with the international commodity prices retreating and U.S. dollar strengthening, inflationary pressures from the external front are receding,'' the government said in the statement. “These factors, coupled with the slowdown in domestic demand and government's relief measures, should be conducive to progressive easing in inflation going forward.''