HONG KONG: Retail sales plunged 13.1% in August from a year earlier as coronavirus restrictions slammed the brakes on spending in the southern Chinese city and tourism slowed to a trickle
Sales dropped to HK$25.6 billion ($3.30bn), government data showed on Wednesday, falling for the 18th straight month but at a somewhat slower pace than in July, when they tumbled by 23.1%.
In volume terms, retail sales fell 13.4%, compared with a revised 23.8% in July.
"As economic conditions remain under pressure and inbound tourism is unlikely to show any swift recovery in the near term, retail trade will remain difficult," a government spokesman said, adding consumers' mood may improve if the number of local COVID-19 cases continue to stabilise.
Hong Kong extended some anti-virus measures into late August after a flare-up in infections, but eased some of the stricter steps in September.
For the first eight months of 2020, retail sales fell 30.2% by value and 31.6% by volume from the same period a year earlier.
The city's biggest retailer association estimated that 15,000 retail stores will close by year end, and urged landlords to extend rental relief. Business consultancy PwC has estimated retail sales will shrink 19.7% in 2020.
Hong Kong's tourist arrivals in August plunged 99.9% from a year earlier to provisional 4,450 visitors, the tourism board said, compared with a drop of 99.6% in July.
All non-residents arriving from overseas by air are prohibited from entering the territory under COVID-19 restrictions, though they can transit at the airport for other destinations.
Sales of jewellery, watches, clocks and valuable gifts, which depend heavily on spending by tourists from mainland China, sank 37.8% in August, compared with a revised 54.3% plunge in July. Sales fell 62.1% in January-August.
The financial hub in August cut its economic outlook for the year, with gross domestic product forecast to contract by 6% to 8%, from an earlier estimate of a 4% to 7% contraction.