Hong Kong inflation hiked to 4.3% in December

Here's what could help absorb the impact.

According to the Census & Statistics Department, overall consumer prices rose 4.3% year-on-year in December, same as in November.

Netting out the effects of the Government's one-off relief measures, the underlying inflation rate increased 3.9% year-on-year, slightly less than in November (4%), mainly due to the smaller increases in the prices of fresh vegetables.

Year-on-year price increases were recorded for electricity, gas and water (7.3%); housing (5.9%); meals bought away from home (4.7%); miscellaneous services (4.6%); food (excluding meals bought away from home) (3.3%); miscellaneous goods (2.7%); transport (2.6%); clothing and footwear (2.2%); and, alcohol and tobacco (1.4%).

Prices for durable goods fell 3.8% year-on-year.

For 2013 as a whole, the Composite Consumer Price Index was on average 4.3%, higher than in the preceding 12-month period. The corresponding increase after netting out the effects of the Government's one-off relief measures was 4%.

Looking ahead, the department said the still-low imported inflation and the feed-through of the milder increases in fresh-letting residential rentals in 2013 should help contain the upside risks to inflation in the near term.