Three years of deflation have ended. Prices of basic necessities began to increase in the last quarter of last year: a (Hong Kong) dollar here, a (Hong Kong) dollar there.
Since almost all Hong Kong's basic necessities in food and other consumer items have to be imported -- vegetables, fresh pork, fresh chicken, live freshwater fish from China; everything else from around the globe -- these price increases were in part a reflection of the shift down in the Hong Kong dollar against most other currencies. With a less favourable exchange rate, the same items cost more.
Added to which, various recent food scares about the safety of pork and fish from China have also resulted either in lower or the complete cessation of the importation of such items. Consumers, if they have a mind to eat such foodstuffs, have been obliged to buy more expensive products imported from areas other than China.
Then there is the price of oil... Currently US$70 a barrel. Received wisdom is that speculators have pushed the price to US$20 more than it need be. Be that as it may, the traded price is the traded price. Airlines hereabouts have twice increased the fuel surcharge for passenger flights this year. Likely the airlines, like the container ship owners, have increased their freight charges applying to their customers: shippers, traders, merchants, retailers.
For local consumers, more price hikes are in the 'pipeline': from First Ferry (+ 9.6%?) and others. Details here.
Since wage increases always lag behind price hikes, for the forseeable future for wage earners what's in store is less spending power and the reduced ability to save.
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