Macau's rising inflation rate is drawing growing attention from economists in the city.

Public discussion about inflation perked up after global human resources network ECA International released survey results last week indicating that living costs for expatriate executives in Macau had overtaken those of Hong Kong, Taipei and Beijing in the past year.

Lee Quane, ECA's Hong Kong general manager, said the jump reflected increases in prices for groceries, clothing and services, such as dry cleaning and maid service.

ECA looks at the prices of about 130 goods and services, but excludes some key expense areas, namely housing, children's education and utilities.

Housing costs in Macau still lag well behind those of Hong Kong, but are rising fast. Macau's official composite consumer price index, which tracks a basket of 555 goods and services, rose 4.5 percent in June from a year ago, primarily because of a 7.8 percent increase in rent and housing costs. Higher food, beverage and clothing prices bolstered the upsurge.

The same forces are at work on Macau's tourist price index, which rose 2.6 percent in the second quarter compared with the previous year. A 7 percent increase in hotel costs provided the biggest impetus.

Economist Albano Martins said the government needs to keep an eye on inflation as he expects the rate to rise further this year. Prices only began rising in Macau a year ago when the city turned the corner on a six-year deflationary bout.

At this point, no one is forecasting a return to the near double-digit inflation levels of the mid-1990s, but Martins said officials must monitor rising wage rates and property prices. The upward revaluation of the Chinese yuan and Beijing's move to raise the maximum amount of currency citizens can carry on overseas travels could have some inflationary effect in Macau, he said.

Cynthia Lam, assistant general manager at Banco Weng Hang, agreed that Macau could see higher inflation rates next year. Most Macau employers usually give employees a maximum of one raise a year, but this year she said some companies have given two raises as they fight to retain staff. The bank received far fewer job applications from graduating students this summer than in past years, she added.

The median monthly wage in Macau increased 16.4 percent from a year before in the first quarter, according to government statistics. Kwan Fung, assistant professor of economics at the University of Macau, said that leap helped heat up the property market by expanding residents' buying power. For many lower-class residents, however, income increases are failing to keep pace with rising living costs, he said.

zach.coleman@singtaonewscorp.com