It’s hard to see Asian central banks not having to clamp down on cheap money sooner rather than later.
February CPI data released this morning showed that prices jumped by a full percentage
point for the month in Hong Kong over the holiday month, more than anticipated. On a
year-over-year basis Consumer Prices registered at 2.8% vs. consensus 2.1%. meanwhile
aggregate food prices increased by 2.5% Y/Y during the month. Although Lunar New
Year has distorted the picture (as has the end of government stimulus programs, such as
rebates on utilities, which helped drive gas and water prices to a level 62.8% over the
prior year), the arrival of higher than anticipated inflation in HK on the heels of India’s
rate announcement has certainly put the specter of inflation back into focus for Asia
watchers, and this evenings February CPI release in Singapore will be scrutinized.
Consensus forecasts peg Singapore’s reading at 1.4% Y/Y.
Photo: Waverly Advisors