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Bloomberg
Hong Kong’s retail sales rose more than expected in July, reversing two months of declines as the city attempts to mount a recovery from Covid-19 curbs and other headwinds.
Retail sales value rose 4.1% in July from a year ago, the Census and Statistics Department said on Wednesday. That compared to a median estimate of a 1.4% rise from economists surveyed by Bloomberg.
Sales volume rises 1% from a year ago, compared to economists’ forecast of a 1.1% decline.
Consumer spending in July got a boost from an improving labour market, while consumption vouchers issued from August will provide additional support in the coming months, a government spokesman said in a Wednesday release accompanying the data.
At the same time, there were risks that “tighter financial conditions and development of the local epidemic will also have bearings on the performance of the retail sector,†he said. The retail data covers consumer spending on goods but not services such as catering, medical care and entertainment. Those services account for over 50% of total consumer spending.
Hong Kong has been trying to mount a recovery as it remains one of the only places in the world to keep in place social distancing and inbound quarantine measures, which have battered the local retail and tourism industries.
The city has taken some steps to ease curbs, this month relaxing international border controls to require three days of hotel quarantine and four days of self-monitoring, down from a week-long hotel stay. But without further changes, Hong Kong’s containment policy stands in stark contrast to others in the region that are opening up, including rival hub Singapore.
Officials have already downgraded Hong Kong’s growth forecast for the full year, predicting a potential contraction in the face of Covid-related restrictions and rising global inflation. The city’s monetary authority has also been forced to follow the hawkish US Federal Reserve in successive interest rate hikes to maintain the local dollar’s peg to the greenback.