Aljif7's Blog
Monday 21 July, 2025
AREA: Finance
We are in another begining of a week. And Hang Seng Index is beginning approaching the 25,000 points. It closed this Monday at 24,994 Points.
In the headlines it shows a Inflation Cools, which could be a factor for HSI to continue bullish.
📉 Hong Kong’s Inflation Cools to 1.4% in June 2025 Amid Subdued Price Pressures
Hong Kong’s inflationary pressures continued to ease in June 2025, with the Consumer Price Index (CPI) rising just 1.4% year-on-year, down from 1.9% in May, according to the Census and Statistics Department (C&SD). The slowdown highlights a broader trend of muted inflationary activity in the city.
📉 What’s Behind the Slowdown?
The decline in the headline inflation rate was partly due to the absence of one-off electricity subsidies introduced in June 2024. When adjusting for all government relief measures, the underlying inflation rate stood even lower at 1.0%, unchanged from the previous month.
On a seasonally adjusted basis, the average monthly change in the composite CPI for the three months ending June 2025 was flat at 0.0%, compared to -0.1% for the period ending in May — signaling that inflation has essentially come to a standstill.
đź›’ What Are Prices Doing? Where we are feeling it to hit our pockets?
In June, Hong Kong consumers saw modest price increases in several key categories, including:
- Housing
- Transport
- Electricity, gas & water
- Alcoholic drinks & tobacco
- Meals out and takeaway food
- Miscellaneous goods & services
However, some sectors experienced price declines, such as:
- Clothing and footwear
- Durable goods
- Basic food items
🏦 Policy Outlook: The influence of U. S. Federal reserve
Unlike many global central banks, the Hong Kong Monetary Authority (HKMA) operates under a currency board system tied to the U.S. dollar, meaning it mirrors U.S. Federal Reserve interest rates. Given this arrangement, the current low inflation environment is unlikely to prompt monetary easing, regardless of the soft price trends. So HKMA follows the actions of U. S, Federal Reserve to balance the rate USD/HKD.
Looking Ahead
Officials expect inflation to remain low and stable in the near term, as domestic and external cost pressures remain contained.
“Looking ahead, overall inflation should remain modest in the near term, as pressures from domestic costs and external prices should stay broadly in check,” said the C&SD in a statement.
The government will continue to monitor developments closely amid an uncertain global economic landscape.
And remember this is not an Investment advice, do your own diligences.
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