A stock market boom and rising property prices in July prompted Hong Kong retail sales to grow at their fastest rate in more than two years, potentially spelling the end of a years-long downturn.
July sales jumped 4 per cent compared with the same period last year, significantly higher than the 0.1 per cent growth in the previous month, government statistics revealed on Tuesday.
Industry insiders attributed the stronger-than-expected growth to robust local consumption and improved inbound tourism, and expected the trend to continue in the second half of the year with support of a stable labour market.
“We are overjoyed at the July figure. The growth is much better than we have expected,” Thomson Cheng Wai-hung, chairman at Retail Management Association said on Tuesday.
He expected the full-year growth to hit 1 per cent, despite the 0.6 per cent decline in the first half.
This would put an end to a two-year contraction of the city’s once-booming industry, as big-spending mainland shoppers flew elsewhere to buy luxuries.
Retail sales in the city dropped for 25 consecutive months until a mild rebound in March.
Cheng said local consumers were a main driver for the upbeat figure, as they felt more comfortable spending money on big-tickets items, with their wealth boosted by the rising value of stocks and properties.