Hong Kong retail sales rise 4.1% in Jan, sees immense pressure ahead

[HONG KONG] Hong Kong's retail sales climbed for a twelfth month in January but the government said data had yet to fully reflect the impact of the latest wave of Covid-19 cases and tighter anti-epidemic measures.

Retail sales in January rose 4.1 per cent from a year earlier to HK$33.9 billion (S$5.9 billion), official data released on Friday (Mar 4) showed. That compares with a revised 6.1 per cent increase in December and is the slowest since July last year with 2.8 per cent growth.

In volume terms, retail sales in January grew 1.7 per cent from a year earlier, compared with a revised 3.3 per cent growth in December.

"In view of the very austere epidemic situation and the various restrictive measures in place, the retail sector will remain under immense pressure in the near term," a government spokesman said, urging the community to work in unison to support the government.

Hong Kong rolled out a vaccine passport last week that requires people aged 12 and above to have at least one Covid-19 vaccination and also tightened restrictions in a city that already has some of the most stringent rules in the world.

In January, online retail sales value jumped 29.8 per cent from a year earlier year compared with a revised figure of 31.7 per cent growth in December.

Sales of jewellery, watches, clocks and valuable gifts, which before the pandemic relied heavily on tourists from the mainland, climbed 7.1 per cent in January after a revised 24.1 per cent surge in December, the data showed.

Clothing, footwear and related products rose 6.6 per cent in January against a 12.5 per cent jump in December.

Tourist arrivals in January soared 61.7 per cent from a year earlier to 7,064. That compares with a 94.1 per cent increase in December.

Bars, gyms, beauty parlours and 12 other types of venues have been ordered to close, and many residents work from home.

People have to show their vaccine record to access venues including supermarkets, shopping malls and restaurants, a major inconvenience in a city where malls link train stations to residences and office buildings.

Hong Kong budget offered Covid relief with tax breaks, handouts and, assuming the epidemic is brought under control, the city's economy is expected recover in the second half of this year, and grow 2.0 per cent to 3.5 per cent for the full year after expanding 6.4 per cent in 2021.

The seasonally adjusted unemployment rate was unchanged at 3.9 per cent in the November-January quarter, though the outlook was is overshadowed by the surge in Covid cases. REUTERS