Hong Kong: Retail sales slow more than expected
September 2, 2013
In July, retail sales increased 8.9% over the same month last year. The reading, which represents a notable deceleration compared to the revised 13.3% expansion recorded in June (previously reported: +13.4% year-on-year), undershot market expectations of a 14.0% increase. The deceleration reflected that lower sales of electrical goods and motor vehicles offset the increase in sales of jewellery and valuable gifts.
Retail sales contracted a seasonally-adjusted 2.9% in the three-month period up to July compared to the previous period. The reading contrasts the 2.8% expansion recorded in June. Despite the deceleration in July, a government spokesman stated that growth in retail sales, which is solid albeit slower, reflects resilient inbound tourism and upbeat consumer confidence. The spokesman noted that stable labor market conditions and strong growth in inbound tourism should continue to underpin retail sales in the coming months.
FocusEconomics Consensus Forecast panelists expect retail sales to expand 13.4% in 2013, which is up 0.6 percentage points over last month's projection. Next year, the panel sees retail sales accelerating to a 15.0% increase.
Author: Ricardo Aceves, Senior Economist