01 Sep 2021
Retailers in Hong Kong reported consumption growth slowed more than forecast in July as coronavirus social distancing measures continued to hinder spending and shoppers awaited electronic shopping vouchers in August.
Retail sales value stood at HK$27.2 billion ($3.5 billion), a 2.9% increase from the same time last year, as per a government report. The average forecast by economists is for 10% growth, Bloomberg reports.
Retail sales volume rose 0.9%, also falling short of forecasts for 6.9% growth.
The government report stated: “The electronic consumption vouchers that the government began to disburse in August have helped stimulate consumption sentiment and will render support to the retail business in the rest of the year.” Consumption in Hong Kong continued to rise moderately as labour conditions improved and the local Covid situation remained stable.
Due to such a resilient financial finances industry, soaring real estate prices and rallying trade, Hong Kong is gradually recovering from the historic recession.
Nevertheless, retail consumption is still being severely impacted by coronavirus border restrictions that have slashed tourism spending.
Moreover, Hong Kong’s population has declined at a record pace over the past year, following the pandemic and national security law.
The Hong Kong government hiked its growth forecast for this year to between 5.5% and 6.5% in early August as it began its distribution of HK$5,000 consumption vouchers to eligible residents to boost spending.
The initiative is set to cost HK$36 billion, providing a 0.7% lift to the year’s economic growth, according to a government report back in April. Hong Kong’s economy grew 7.6% in Q2 on an annual basis.