Inflation fears grow as incomes stagnate

June Chen

Fears over inflation are growing in Hong Kong, with more household seeing their incomes stagnate in recent months, a survey shows.

Only 29 percent of residents saw an increase in their household income over the past three months, a drop of 13 percentage points from a year ago, according to the quarterly survey by credit reporting agency TransUnion.

The survey, which interviewed 853 residents , found about 20 percent of them expect they may not be able to pay their current bills and loans in full, three percentage points higher than the same period a year ago.

Additionally, at least one in three consumers expect further decreases in discretionary spending to better manage their finances.

Looking into the top concerns affecting household finances in the next six months, 60 percent of consumers said they are worried about the inflation of everyday goods such as groceries and gas, followed by 57 percent who reported being concerned about a possible recession, and 53 percent said that they were uneasy about job security.

And 30 percent of consumers expressed interest in applying for new credit or refinancing existing credit over the coming year.

"The decline in optimism about household finances is a concerning trend. The latest data from TransUnion's Consumer Pulse Study reveals that consumer sentiment is cooling. The vulnerabilities of Generation Z in managing their debt are a wake-up call for borrowers and lenders, and it shows a clear need to improve financial literacy among younger generations," said Sun Weihan, Principal of Research and Consulting for Asia Pacific at TransUnion.