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Hong Kong retail sales rise in 2017, ending slump, as tourism picks up
[HONG KONG] Hong Kong retail sales ended a three-year slump in 2017, growing by 2.2 per cent thanks to an uptick in tourist arrivals from mainland China plus strong property and share prices that boosted sentiment.
Retail sales increased to HK$446.1 billion (S$75.3 billion) for the year, government data showed on Thursday. In volume terms, retail sales grew 1.9 per cent, following two consecutive years of slide.
In 2017, retail sales "resumed modest growth, having declined on an annual basis since 2014," the government said.
"The near-term outlook for the retail trade stays positive, given the more sanguine economic situation and improving inbound tourism." December was the 10th straight month of annual gains, and analysts expect the recovery to continue this year, helped by how the financial hub's unemployment rate hovers at its lowest level in two decades.
"Combined with a low jobless rate and a recent weakening US dollar against major currencies, Hong Kong's retail sector should be recovering well in the medium term and exceed the all-time high in 2013 within the next 5 years," said Michael Cheng, Asia Pacific & Hong Kong/China consumer markets leader of PwC.
For 2018, Cheng expects 4-6 per cent growth in the city's retail sales. Hang Seng Bank estimates 4 per cent and the Hong Kong Retail Management Association forecast 3-4 per cent growth.
In December, retail sales value grew 5.8 per cent to HK$44.8 billion, and increased 4.3 per cent in volume terms.
Hong Kong's jobless rate for October-December dropped below 3 per cent for the first time in nearly 20 years.
Tourist arrivals in December were 4.7 per cent higher than a year earlier, and the number of mainland visitors was up 7.2 per cent, according to the Hong Kong Tourism Board.
After declining in 2015 and 2016, the total number of visitors increased last year, rising 3.2 per cent to 58.47 million. Of those, mainland visitors accounted for 76 per cent, and were 3.9 per cent higher than in 2016.
With its economy closely tied to its giant northern neighbour, Hong Kong has gained from buoyant trading and manufacturing activities linked to China's economic activity.
Sales of jewellery, watches, clocks and valuable gifts, rose 6.3 per cent in December from a year earlier. For all of 2017, the segment - which slumped the three previous years, grew 5.2 per cent.