According to the government on Wednesday, retail sales declined in Hong Kong in November, ending two consecutive months of growth.

November’s retail sales eased 4.2% compared to the year before in value terms to HK$29.5 billion ($3.77 billion). This was down from October’s HK$31.9 billion figure when retail sales increased 4% from the same month in 2021.

The economy has been impacted by the strict Covid curbs, which saw tourism come to a standstill, Reuters reports. Yet last week, all restrictions – apart from mandatory mask wearing – were eased, and it’s hoped that quarantine-free travel with mainland China could resume by 8th January.

“The expected increase in visitor arrivals should benefit retail sales performance,” said a government spokesperson.

Hong Kong continues to face inflation and monetary tightening headwinds, and soaring interest rates and a gloomy economic outlook have weighed on asset prices. Home prices in November fell to over a five-year low.

In addition, between January and November, Hong Kong’s total retail sales fell 1.1% compared to the same 11 months in 2021. Whereas in terms of volume, November’s retail sales fell 5.3% from the year before, following a 2.5% rise in October. 

Furthermore, the number of tourists visiting Hong Kong rose 10-fold from the year before to 113,763, following on from a 760.9% leap in October.

The Reuters report adds that Hong Kong’s seasonally adjusted unemployment rate declined by 3.7% between September and November, an improvement for the seventh consecutive month.

In addition, in November, online retail sales in Hong Kong increased 9.4% year-on-year in value terms, compared to October’s revised 35.1% growth. Online sales rose 21.9% between January and November last year.