Hong Kong's inflation rose by 1.2 percent in January 2022 year-on-year, smaller than the increase of 2.4 percent in December 2021 due to the higher base of comparison in January 2021.

The effect of the electricity subsidies in 2020 had largely dissipated in January 2021, the Census and Statistics Department said.

Excluding the government's one-off relief measures, the year-on-year rate of increase in the Composite Consumer Price Index, or the underlying inflation rate, was also 1.2 percent in January, smaller than 1.4 percent in December 2021, due to the smaller increases in electricity charges as well as the decreases in the prices of fresh vegetables.

Amongst the various components of the Composite CPI, increases in prices were recorded last month for transport, clothing and footwear, meals out and takeaway food, durable goods, basic food and miscellaneous services.

Meanwhile, the decreases were recorded for electricity, gas and water, miscellaneous goods, housing and alcoholic drinks and tobacco.

"As the fifth wave of local epidemic has taken a heavy toll on economic activities and will likely constrain domestic price pressures, underlying inflation should stay moderate in the near term," said an official representative.

Looking ahead, credit rating agency Moody's expects Hong Kong to grow the economy by 3.5 percent this year fueled by spending, the government's stimulus plans and export, after a 6.5 percent jump in 2021, said vice president of Investors Service Martin Petch.

Underlying inflation is expected to remain moderate. SING TAO

Inflation slows in HK