(Adds tourism numbers, retail data breakdown, government comment)
* Feb retail sales value drops 44% y/y, 13th month of decline
* Feb tourist arrivals down 96.4% y/y, down for 8th straight month
* Sales of jewellery, watches down 78.5% in Feb y/y
* Government says retail trade will remain extremely austere
By Donny Kwok and Twinnie Siu
HONG KONG, March 31 (Reuters) - Hong Kong’s retail sales fell by a record 44% in February from a year earlier, as travel restrictions kept tourists away and residents avoided shopping centres to prevent the spread of the coronavirus.
The spending drought has hit an economy already in recession after months of often-violent anti-government protests.
Retail sales in February fell 44% from a year earlier to HK$22.7 billion ($2.93 billion), compared with a revised 21.5% drop in January, government data showed on Tuesday.
In volume terms, retail sales fell 46.7%, compared with a revised 23.1% drop in January.
“The business environment of retail trade will remain extremely austere in the near term, as the COVID-19 pandemic has brought inbound tourism to a standstill and severely dented local consumption demand,” a government spokesman said, referring to the disease caused by the coronavirus.
The government would closely monitor the repercussions on the overall economy and employment, the spokesman said.
Fears over the coronavirus led to shoppers clearing supermarket shelves of basic necessities. In February, knife-wielding robbers stole toilet paper rolls following a panic-buying induced shortage.
The value of sales of commodities in supermarkets increased by 12.2% in February compared with the same period a year earlier, the data showed.
Last month, Hong Kong unveiled plans for a record budget deficit in 2020/21, including cash handouts to residents and tax breaks for firms, though bankruptcies and unemployment - already at its highest in nearly a decade - are expected to rise.
Hong Kong's tourist arrivals plunged by 96.4% year-on-year in February to 199,123 visitors, compared with a 52.7% drop in January, the Hong Kong Tourism Board said. (bit.ly/2yh0Inf)
The number of mainland visitors fell 97.8% year-on-year last month to 98,804.
This month, the government banned all tourist arrivals as part of its efforts to stem the spread of the coronavirus.
Sales of jewellery, watches, clocks and valuable gifts, which rely heavily on mainland tourists, plunged 78.5% on-year in February, compared with a 41.5% drop in January. Medicines and cosmetics fell 56.5%, while department store sales dropped 58%. ($1 = 7.7529 Hong Kong dollars) (Reporting by Donny Kwok and Twinnie Siu Editing by Marius Zaharia and Robert Birsel)