Hong Kong's inflation moderated to 4.5%

Driven by private housing rentals.

According to BBVA Research, Hong Kong’s August inflation has eased in line with expectations, to 4.5% y/y (consensus: 4.4% y/y) after July’s outturn of 6.9% y/y, that was distorted by base effects from a one-off government waiver of housing rents. 

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Netting out the effects of all government one-off relief measures, the August inflation rate was 4.3% y/y, compared to 4.2% y/y in July.

The main driver of inflation in August continued to be private housing rentals, despite a recent easing in property price increases on tighter property sector measures. We expect inflation to remain steady through end-year, for a full-year average of 4.2%.