Hong Kong August retail sales slip, tight financial conditions dim outlook

People wearing protective masks walk inside the International Finance Center (IFC) shopping mall, following the coronavirus disease (COVID-19) outbreak in Hong Kong, China September 14, 2020. REUTERS/Tyrone Siu/File Photo
  • Aug tourist arrivals soar 451.4% after July's 454.4% growth
  • Aug jewellery, watch sales up 4.3% y/y vs July's 30.1% jump
  • Govt says tight financial conditions will pose constraints

HONG KONG, Sept 30 (Reuters) - Hong Kong's retail sales in August edged down on an annual basis while the growth rate also slowed from the month before, data released on Friday showed, and an official warned that tightening conditions poses risks for the outlook.

Retail sales in August stood at HK$28.6 billion ($3.64 billion), up 0.9% from July's HK$28.3 billion when it rose 4.1%, and down 0.1% from a year ago, according to the official data.

For the first eight months, the total retail sales value decreased 1.5% compared with the same period last year.

"The increasingly tight financial conditions will pose constraints," a government spokesman said.

In volume terms, retail sales in August fell 2.9% from a year earlier. That compared with a revised 1.1% growth in July. For the first eight months of the year, the volume decreased 4.5% from a year earlier.

COVID-19 restrictions have weighed on the economy since early 2020, grinding tourism to a halt and battering sales at bars, restaurants and shops.

Hong Kong's economy contracted 1.3% in the second quarter from a year earlier, marking the second consecutive quarter of year-on-year gross domestic product (GDP) contraction for the Asian financial hub. read more

However, the city's seasonally adjusted unemployment rate eased to 4.1% in the June-August quarter, improving for the fourth consecutive period as economic activities revived in an easing COVID situation and support from a consumption voucher scheme. read more

In August, sales of jewellery, watches, clocks and valuable gifts, which before the pandemic relied heavily on tourists from the mainland, rose 4.3% from a year earlier, following a revised 30.1% jump in July, the data showed.

Sales of clothing, footwear and allied products in August fell 8.4% year-on-year after a revised 2.4% rise in July.

Tourist arrivals in August rose 451.4% from a year earlier to 59,610. That compared with a 454.4% jump in July.

Online retail sales in August increased 21.3% year-on-year in value terms, compared with a revised 8.4% rise in July. It was up 21.7% for the first eight months of 2022.

($1 = 7.8497 Hong Kong dollars)

Reporting by Donny Kwok and Twinnie Siu; Editing by Shri Navaratnam

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