Hong Kong June retail sales decline at a slower pace

HONG Kong's retail sales in June fell at a slower pace than the previous month, official data released on Tuesday (Aug 2) showed, and the government plans more measures, including consumption vouchers, to provide support to the sector.

The value of retail sales in June were HK$27.7 billion (S$4.8 billion), down 1.2 per cent from a year earlier and less than a revised 1.6 per cent drop in May, according to the data.

For the first half of 2022, the total retail sales value decreased by 2.6 per cent compared with the same period last year.

The government said retail sales performance improved in the second quarter but the momentum softened in the latter part of the period amid an increased number of local Covid-19 cases and a rise in interest rates.

In volume terms, retail sales in June fell 4.1 per cent from a year earlier, compared with a revised 4.8 per cent decline in May. For the first 6 months of the year, the volume decreased 5.6 per cent from the year ago period.

The former British colony has some of the strictest coronavirus regulations in the world outside mainland China, which is pursuing a "dynamic zero Covid" strategy of eradicating outbreaks as soon as they occur, with businesses hit hard by widespread closures.

"Looking ahead, the upcoming disbursement of Phase II consumption vouchers will help support consumption demand," a government spokesman said, adding retail sales performance will also depend on how the local epidemic evolves and how tighter financial conditions affect spending power and sentiment.

The city's economy in the second quarter shrank 1.4 per cent from the same period a year earlier amid slowing external trade and as Covid-19 weighed on economic activity.

Sales in June of jewellery, watches, clocks and valuable gifts, which before the pandemic relied heavily on tourists from the mainland, rose 2.3 per cent from a year earlier, following a revised 7.7 per cent increase in May, the data showed.

However, sales of clothing, footwear and related products in June fell 4.6 per cent from a year earlier after a 1.7 per cent slide in May.

Tourist arrivals in June soared 563.1 per cent from a year earlier to 41,112 up from a 252.7 per cent jump in May.

Online retail sales in June increased 0.5 per cent year-on-year in value terms, slowing from a revised 2.9 per cent increase in May. It was up 24 per cent for the first half of 2022.

Hong Kong enforces fewer Covid restrictions than China, but its policy still contrasts to much of the rest of the world which is co-existing with the virus, with flight suspensions and mandatory hotel quarantine hammering the city's competitiveness. REUTERS