Hong Kong's lacklustre retail market is set to join in the economic recovery and post growth of at least 13 per cent this year, investment bank Lehman Brothers says.
In a new report, Lehman said retail sales would be boosted by a jump in property prices, a stable interest rate outlook and solid growth in gross domestic income.
If shoppers came out in expected numbers and the transition to Chinese rule proceeded smoothly, retail sales could surge by as much as 16 per cent.
Miron Mushkat, Lehman's chief economist for the Asia-Pacific and co-author of the report, said: 'Economic forces have recently reversed direction and are now driving consumer demand upwards.
'The recovery in durable sales, like motor vehicles and parts, illustrates the point.' The retail sector has endured two sluggish years, with areas such as consumer durables suffering a sales slump.
While equity markets and the real economy are buoyant, most retail sectors have not yet joined the party.
Lehman said that situation was due to end as a recovery in retail sales gained momentum in the months ahead.
