英文

Editorial : The threat of stagflation must not be underestimated

【明報專訊】This year's iBond, an inflation-indexed bond, will become available for subscription next month. Though the government will increase the issuance size, market participants are optimistic about its reception. This highlights many investors' and citizens' concern about the risk of rising global inflation. Recently, Brazil has been under the pressure of stagflation, and in the shadow of recession, its central bank has had to raise interest rates to curb inflation, which is a warning signal to the world.

Having contracted for six consecutive quarters, Hong Kong's economy rebounded only in the first quarter of this year by growing 7.8% year-on-year. The growth rate has exceeded market expectations by a wide margin. Some major banks have also drastically raised Hong Kong's growth forecast for the entire year from 4.6% to 9.2%. Ordinary citizens, however, do not seem to feel much improvement in their living standards. The pandemic has worsened the disparity between the rich and the poor. Although the pandemic in Hong Kong has eased off, the economic recovery is uneven. In the first quarter, economic growth was mainly driven by exports, and consumption remained weak. Furthermore, the spectre of global inflation has risen suddenly, and its impact on Hong Kong is unclear. If one is blindly optimistic and underestimates the risks, one could get one's fingers burnt.

In the fourth quarter of last year, Hong Kong reported an inflation rate of minus 0.3% year-on-year, which rose to 0.9% merely in the first quarter of this year. On the surface, there does not seem to be much inflationary pressure. However, if we put aside factors such as falling private housing rents, citizens' expenditures have actually increased on water, electricity and gas supplies. In recent months, bus fares have risen significantly. MTR fares have not been lowered, so in effect they have risen as well. The public is gradually feeling the pressure of rising prices. Hong Kong is a small economy. If inflation outside Hong Kong rises significantly, the city could face rapidly rising inflation pressure from imported goods. The Hong Kong government believes that local price pressures will "maintain moderate in the short term". Looking ahead at the years between 2022 and 2025, the local inflation rate will be about 2%. Some major banks predict that in the third quarter of this year, local inflation may rise to a high of 4% year-on-year before falling gradually. If economic growth resumes, a 2% inflation is a tolerable level. The question is whether things will develop in a different way, leading to a "black swan" scenario of high inflation.

When vaccines were rolled out late last year, markets expected developed countries to recover. Over the past half year, commodity prices have kept rising. The rise in the price of copper, which is closely related to production, has been particularly remarkable. Three-month copper prices have recently surged past the previous high of 10 years ago and are now in record levels. Economic recovery in the US has accelerated in recent months, with the growth rate reaching 6.4% year-on-year in the first quarter. But inflation has also increased significantly. The US Consumer Price Index (CPI) in April increased by 4.2% year-on-year, the largest increase in more than 12 years and much higher than market expectations. All the indications are that producers are beginning to pass on the costs of rising commodities and wages to consumers.

With the spectre of inflation rising suddenly, global stock markets are also fluctuating. Hong Kong stocks are falling repeatedly. Therefore, it is not surprising that many people intend to purchase the iBond. However, those who can benefit from it will be limited to people with money to spare rather than the masses. Although there are some relief measures for the grassroots in this year's Budget and the electronic consumer vouchers will be distributed later, we have to wait and see how much they actually help. The authorities need to pay close attention to the external economic circumstances, play out all possible scenarios, and come up with countermeasures as soon as possible.

明報社評2021.05.14:通脹壓力蓄勢待發 滯脹風險不容低估

本年度通脹掛鈎債券(iBond)下月接受認購,政府提高發行額,市場人士看好認購反應,突顯不少投資者和市民都很關心全球通脹升溫風險。最近巴西面臨滯脹壓力,央行不得不在衰退陰霾下加息遏阻通脹,對全球而言是一個警號。

香港連續6季經濟收縮,直至今年首季始扭轉頹勢,按年增長7.8%,超出市場預期甚多,有大行還將香港全年增長預測,由4.6%大幅上調至9.2%,然而若問一般市民,恐怕很多人並不覺得生活有多少改善。疫下貧富懸殊加劇,儘管本港疫情緩和,可是經濟復蘇步伐並不平衡。本港首季經濟增長,主要靠出口拉動,消費仍然疲弱,更甚的是,全球通脹陰霾驟起,對香港衝擊未明,盲目樂觀低估風險,有可能焦頭爛額。

本港去年第4季按年通縮0.3%,今年首季通脹亦僅0.9%,表面看似乎沒有太大通脹壓力,然而撇開私人房屋租金下跌等因素,市民水電煤等開支其實都錄得升幅。近月巴士大幅加價、港鐵不減實加,市民漸漸感受到物價上升壓力;香港作為小型經濟體,萬一外圍通脹顯著惡化,輸入通脹壓力更可能急增。港府認為本港物價壓力「短期維持溫和」,展望2022至2025年,本地通脹趨勢約為2%;有大行則預測,今年第3季,本港通脹按年或會升至4%高位,之後逐步回落。倘若經濟回復增長,2%通脹是可以承受的水平,問題是現實發展會否有所偏差,甚至出現高通脹「黑天鵝」。

去年底疫苗面世,市場憧憬發達國復蘇,商品價格半年來持續上漲,與生產息息相關的銅價升幅尤其顯著,3個月期銅最近升破10年前的高位,創下歷史新高。近月美國復蘇步伐加快,首季增長按年達到6.4%,不過通脹升幅亦甚顯著。美國4月份消費者物價指數(CPI),按年增長4.2%,升幅是逾12年來最大,遠高於市場預期,種種迹象顯示,生產商開始將大宗商品及工資上漲的成本轉嫁消費者。

通脹陰霾驟起,環球股市波動,港股拾級而下,有意認講iBond者眾,不足為奇,可是受惠者始終限於一些有閒錢的市民,幫不了普羅大眾。今年財政預算案雖有一些基層紓困措施,稍後亦將派發電子消費券,實際幫助有多大,仍得走着瞧。當局有必要密切留意外圍經濟形勢,就着各種可能情景,多做沙盤推演,及早考慮對策。

■Glossary

生字

get your fingers burnt : to suffer as a result of doing sth without realising the possible bad results, esp. in business

play out : If you play out a situation, you pretend that it is really happening

scenario : a description of how things might happen in the future

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