Business | Economy
Hong Kong inflation accelerates to 6.1%
Hong Kong's inflation accelerated in June to the fastest pace in four months as food and energy costs climbed.
- Bloomberg
- Published: 00:07 July 22, 2008
Hong Kong: Hong Kong's inflation accelerated in June to the fastest pace in four months as food and energy costs climbed.
Consumer prices rose 6.1 per cent from a year earlier, the government said on Monday on its website, after gaining 5.7 per cent in May. That compared with the 5.8 per cent median estimate of 15 economists surveyed by Bloomberg News.
The yuan's 6.9 per cent gain against the Hong Kong dollar this year has added to rising costs for food imported from mainland China.
Chief executive Donald Tsang last week proposed HK$11 billion ($1.4 billion) of inflation relief, including electricity subsidies and a food allowance for the poor, saying that "extreme times'' call for "extreme measures.''
"The package is meant to relieve the pain,'' said Kevin Lai, senior economist at Daiwa Institute of Research in Hong Kong. "There will only be additional pressure for prices to rise as the government spending translates into higher demand.''
Rising costs
Food prices rose 11.3 per cent in June from a year earlier and utility costs increased 7.4 per cent, the government said. Rents climbed 6.3 per cent.
Truck and minibus drivers parked their vehicles to block roads in the Central district on June 10 to protest fuel prices. Transport workers for Watsons Water, a subsidiary of Hutchison Whampoa, started a strike on Monday, demanding higher wages because of inflation, Radio Television Hong Kong reported.
The government has waived property rates for the second and third quarters of 2007, the whole of 2008 and the first quarter of 2009.
Last week's proposals include wiping two more months' rent for public-housing tenants. The government had already foregone one month's rent this year.
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