Hong Kong August retail sales worst on record

02/10 2019 11:00

Hong Kong’s August retail sales were the worst on record, the government said on Wednesday, as escalating anti-government protests that have gripped the Chinese-ruled city for nearly four months scared off tourists and battered spending.

Retail sales in August fell 23% from a year earlier, government data showed, worse than a 21.48% fall in September 1998, according to Refinitiv data, as violent clashes spread across shopping districts and took a heavy toll on malls.

Cat-and-mouse clashes on Tuesday spread from the shopping district of Causeway Bay to the Admiralty area and then on to the New Territories, with police firing tear gas and water cannon at petrol bomb-throwing activists.

Protesters were out again on Wednesday but there were no reports of serious trouble.

Market analysts say the outlook is overshadowed by the protests and a weak Chinese yuan that translates into lower spending.

Retail sales fell to HK$29.4 billion ($3.75 billion) in August, a seventh consecutive month of decline. July’s drop was a revised 11.5%. In volume terms, retail sales in August fell 25.3%, compared with a revised 13.1% drop in July.

For the first eight months of 2019, retail sales fell 6% in value from a year earlier and 6.9% in volume terms.

“Retail sales will likely remain in the doldrums in the near term, as the worsened economic outlook and local protests involving violence continue to weigh on consumer sentiment and inbound tourism,” a government spokesman said.

The government will monitor the implications for the labor market and the economy, he added.

Hong Kong is facing its first recession in a decade, with the government recently cutting its full-year 2019 growth forecast to 0-1%, down from 2%-3% previously.