Hong Kong retail sales fall in May on declining tourism, weak local consumption

Hong Kong’s retail sales fell for the 15th straight month in a row in May, on account of declining tourism, coupled with weak local consumption, triggering concerns of a deeper slump.

Retail sales in May slid 8.4 percent from a year earlier to HKD35.7 billion (USD4.60 billion) in value terms, deeper than a 7.5 percent slump in April. In volume terms, May sales dropped 9 percent, government data showed on Thursday.

Hong Kong tourist arrivals in May fell 6.4 percent from a year earlier, to 4.45 million, after sliding 2.1 percent in April. Mainland visitors, who account for 74.6 percent of the total, fell 8.3 percent to 3.32 million in May.

In addition, sales of jewelry, watches, clocks and valuable gifts in May fell for the 21st consecutive month, to 18.7 percent in value terms. Department store sales slid 5.9 percent on year, while wearing apparel fell 5.7 percent.

"Retail sales declined in most segments. While the chance of seeing a turnaround is unlikely, we have to watch closely the jobless rate - a rise in unemployment may point to a further slowdown in the economy," Reuters reported, citing Paul Tang, Chief Economist, Bank of East Asia.

Meanwhile, Hong Kong is struggling the odds of mounting economic challenges and a stronger currency, the HKD being linked to the USD. Meanwhile, mainland tourists are avoiding the city amid political tensions with China and growing calls from radical activists for greater autonomy from Beijing, reports said.