A spokesman said: ''The trade performance, as reflected in the June figures, was somewhat below expectations.

''While the reduced growth rates were due in part to a high base of comparison in June last year, the weaker-than-expected demand in Hongkong's major markets was also likely to have been a significant contributory factor.'' Government statistics show that in the past five years the monthly percentage growth on the previous 12 months last fell below 10 per cent in 1990, bottoming out at 7.66 per cent in August of that year.

Weak overseas markets and a high base in June last year were largely blamed for the fall-off, with most economists saying it is too early to start seeing the impact of China's austerity programme on Hongkong trade.

Bank of East Asia head of economic research Benjamin Chan Sau-san said: ''I don't think China is a factor at this stage, because China's own figures show imports increasing at a very fast rate.

''Usually total trade in China reflects the performance of re-exports in Hongkong.'' However, Jardine Fleming Broking regional economist Ranjan Pal said: ''These figures are quite disappointing, but could be partially explained by June's domestic exports last year recording a 12.2 per cent year-on-year rise.

''But it could also be to an extent the measures taken to slow down economic growth in China. The slowdown we are expecting in China should be taking effect now, but some of it could even have begun in June because that is when Zhu Rongji announced his 16-point programme.'' Others said measures to curb the economy brought in ahead of the showpiece announcement would have filtered through into June figures.

Domestic exports took the biggest hit last month, with overseas markets buying up some 12.3 per cent less Hongkong-made goods than in the same month last year. The total spend on domestic exports in June was $18.51 billion.

But re-exports - traditionally the engine of growth and heavily dependent upon China - saw expansion slow sharply to just 13.4 per cent, for a total $67.04 billion.

Crosby Securities economist Ray Farris said June 1992 growth hit a four-year high, and normalising that figure - based on growth rates achieved during the same period - gave a two per cent contraction in domestic exports and a 25 per cent rise in re-exports.

Total exports surged in June last year thanks to a flurry of activity prompted by exaggerated concerns over the renewal of China's Most Favoured Nation status, he said.

But elsewhere economists took a dimmer view of the forecasts, which surprised many.

One economist said poor growth in the US, which was unlikely to turn around even in the current quarter, was compounded by blanket recession in Europe, most recently highlighted by the French franc's battle in the European exchange-rate mechanism.

He said: ''If the American and European markets are not there - and on top of all that you have got Hongkong not really being much of a domestic operator any more - the drop in domestic exports should be no surprise.'' He said that even markets in the region were trimming their spending on Hongkong made goods, leaving Singapore to prop up the sector.

Mr Farris said the biggest area of weakness was the textile market in Europe - a key area for Hongkong traders - and this was exacerbated by general sluggishness across Japan, Taiwan and Europe, with the exception of Germany.

At the same time, Hongkong's imports swelled 5.5 per cent to $89.29 billion, giving an overall merchandise trade deficit of $3.74 billion.

For the six months to June, total exports have risen 15.1 per cent to $478.97 billion and imports have climbed 14.5 per cent to $506.73 billion.

Splitting up the export figure, domestic exports made up 21.5 per cent of the total and growth fell 3.5 per cent to $103.18 billion and re-exports rose 21.5 per cent to $375.79 billion.

Barclays de Zoete Wedd economist Catherine Chou said domestic exports had bottomed out at June levels, and she expects a rebound on a relatively weak Hongkong dollar.