Hong Kong Breaks Long Deflation Streak
HONG KONG -- The government announced the official end to nearly six years of deflation, signaling a milestone in the city's recovery from an economic decline that began with the 1997-98 Asian financial crisis and was prolonged by last year's SARS outbreak, which devastated tourism, destroyed jobs and spurred political unrest.
Official figures show consumer prices in July rose 0.9% from a year earlier, marking the first year-to-year rise in 68 months. The percentage rise was particularly sharp because consumer prices had been pushed down in July 2003 by plummeting confidence during the outbreak of severe acute respiratory syndrome.
Month-to-month increases in consumer prices already showed that Hong Kong's deflationary cycle, or decline in prices for goods and services, ended some 10 months ago, economists said, but yesterday's announcement provided a needed boost for authorities ahead of an important election in three weeks.
At an economic conference yesterday, Chief Executive Tung Chee Hwa exulted in the pickup, saying "we are today once again on our way to becoming an extremely competitive and dynamic economy." Economic data show "a lot of excess fat has been burnt," he added. At the same conference, Financial Secretary Henry Tang said Hong Kong had "truly walked out" of the deflationary cycle. He predicted that Hong Kong's gross domestic product, or the total value of goods and services produced there, could expand at a faster pace this year than the government's 6% forecast.
Increases from a year earlier in the consumer-price index's overall basket of goods and services during July were caused in part by utilities, clothing and food, which rose 13.5%, 7.5% and 3.1%, respectively.
Housing prices, which account for 20% of the index, fell 2.8%, the largest decline from a year earlier. Economists said they expect housing prices to rise later in the year, when many two-year leases on apartments end.
Rising oil prices -- which neared US$49 a barrel last week -- are also expected to increase inflationary pressures. In the past month, Hong Kong's flagship Cathay Pacific Airways raised ticket prices by as much as $19, citing high fuel costs.
The long deflationary cycle in one of Asia's most expensive cities was a drag on its economic rebound, damping investment and property prices as consumers held off purchases in anticipation of further drops in price. The return of mild inflation is good news, economists said, bolstering the property market and encouraging consumer spending. "There'll be more energy, more money flowing through the system," said Jim Walker, chief economist at CLSA Emerging Markets.
Thanks to rising consumer confidence, a stronger property market and a bonanza of tourists from China, Hong Kong's GDP grew 6.8% from a year earlier in the first quarter, its best performance in three years.
But the unemployment rate, at 6.9%, is still one of the highest in developed Asian economies, while the income gap has widened during the past few years. Political analysts said these factors contributed to an increase in the number of street protests targeted primarily at the Beijing-appointed Mr. Tung.
Over the past year, China has sought to minimize political discontent in Hong Kong through an array of economic incentives, but hundreds of thousands still demonstrated on July 1, the seventh anniversary of the city's return to Chinese sovereignty.
Pro-Beijing parties are expected to lose heavily in the Sept. 12 elections for the Legislative Council, Hong Kong's chief lawmaking body.
香港和通货紧缩说再见
香港政府宣布，持续近6年的通货紧缩局面正式结束，这是当地经济摆脱低迷步入复苏的一个里程碑。在1997-98年的亚洲金融危机期间，香港经济开始下滑，而去年非典型肺炎(SARS)的爆发更是雪上加霜，使得旅游业遭到重创，并打击了就业，引发政局动荡。
官方数据显示，香港7月份消费者价格指数较上年同期上涨0.9%，为68个月以来的首次上涨。由于上年同期的SARS疫情严重挫伤消费信心，造成物价比较基数偏低，因此今年7月的同比涨幅显得尤为明显。
经济学家称，消费者价格指数的逐月上涨已经表明，香港的通货紧缩周期在大约10个月前就宣告结束。但是周一的消息使政府声望获得了急需的提振。3周后，香港将进行一项重要的选举。
在昨天的一个经济会议上，香港特首董建华对经济反弹表示欣喜，他说，“今天我们已重上轨道，朝著凭实力、活力取胜的经济体进发。”他补充道，经济数据表明，“过去几年相信燃烧了不少多余脂肪”。
在同一个会议上，财政司司长唐英年(Henry Tang)说，香港已经真正走出了通货紧缩阴影。他预计香港今年的本地生产总值增幅可能超过6%的政府预期。
香港7月份消费者价格指数较上年同期的上涨在一定程度上受到公用事业、服装和食品价格的影响，它们分别上涨13.5%、7.5%和3.1%。
占消费者价格指数20%的住宅价格7月份较上年同期下跌2.8%，为跌幅最大的一个领域。经济学家称，他们预计，住宅价格今年晚些时候将会上涨，因为许多两年期的房屋租约将要到期。
不断上涨的油价（上周逼近每桶49美元）预计也会加大通货膨胀压力。在过去的一个月中，香港的旗帜航空公司国泰航空(Cathay Pacific Airways)将机票价格上调19美元，称原因是燃油成本高涨。
香港是亚洲物价最高的城市之一，而长期以来的通货紧缩拖累了当地的经济复苏进程，致使投资疲弱、房地产价格低迷。经济学家称，重现温和的通货膨胀是一个好消息， 它会提振房地产市场，刺激消费者支出。里昂证券新兴市场(CLSA Emerging Markets)首席经济学家沃克(Jim Walker)称，将有更多资金涌入香港经济，香港将更具活力。
受消费信心上升、房地产市场走强和大量中国大陆游客访港推动，香港第一季度本地生产总值较上年同期增长6.8% ，为3年来的最高水平。
然而，香港失业率为6.9%，仍居亚洲发达地区前列
