Hong Kong Retail Sales Slump 4.2%, Worst Fall In 8 Months

Hong Kong’s retail sales declined for the first time in three months and at the fastest pace in eight months in November, and tighter financial conditions are likely to continue damping consumption ahead, while a relaxation in Covid restrictions and an improvement in the labor market are expected to lent support.

The value of retail sales dropped 4.2 percent annually in November, after a 4.0 percent growth in October, provisional figures from the Census and Statistics Department showed on Tuesday. This was the worst decline since March, when sales fell 13.8 percent.

Tightened financial conditions will continue to weigh on local consumption demand, while the further relaxation of social distancing measures and continued improvement in labor market conditions will provide support, a government spokesman said.

Further, the expected increase in visitor arrivals should benefit retail sales performance, the spokesman added.

Online sales accounted for 12.8 percent of the total retail sales value in November. The value of online retail sales grew 9.4 percent year-on-year after a 35.1 percent jump in October.

Sales for department stores logged a double-digit fall of 19.3 percent in November and those for clothing, footwear and allied products decreased by 15.2 percent.

Sales of jewelry, watches and clocks, and valuable gifts fell 8.3 percent. Sales of other consumer goods, and fuel decreased by 5.2 percent and 1.9 percent, respectively.

The retail sales volume slumped 5.3 percent year-on-year in November, after a 2.5 percent gain in the prior month.

On a seasonally adjusted basis, the total retail sales value rose 1.6 percent in the three months ending in November compared with the previous three-month.

Hong Kong’s inflation was steady at 1.8 percent in November, which is the highest in nearly eight years. Inflation is largely fed by import prices as prices remain high in major economies.

In December, the Hong Kong Monetary Authority that adjusts its benchmark rate in sync with the US Federal Reserve, lifted the base rate by 50 basis points to 4.75 percent.

The city’s jobless rate declined to 3.7 percent in the three months ended November with unemployment falling across almost all the major economic sectors.

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