Impact of Middle East war on Hong Kong’s inflation limited, finance chief says

Inflation forecast raised to 2.6 per cent, but Financial Secretary Paul Chan says service-based economy and stable mainland Chinese supplies cushion impact

Hong Kong’s finance chief has said the Middle East war has played only a limited role in driving up local inflation, noting the city’s service-based economy and stable energy supplies from mainland China have mitigated the effects of external shocks.

Briefing the Legislative Council on Monday, Financial Secretary Paul Chan Mo-po said the surge in global fuel prices was expected to affect fuel-related consumer prices, pushing inflation higher.

“Rising international oil prices will continue to feed through to consumer prices and the fuel-related products,” Chan told Legco’s panel on financial affairs.

“However, as Hong Kong is a service-oriented economy with relatively low energy dependency, and with stable energy supplies from the mainland, the external impact can be mitigated.”

Lawmakers asked Chan whether the government had considered all factors when revising the forecast.