Hong Kong's exports declined for the third month in a row amid sluggish global demand. Total exports decreased 1.6 per cent year-on-year to HK$320.9 billion in July, after a year-on-year fall of 3.1 per cent in June and 4.6 per cent in May, the Census and Statistics Department said yesterday. The data showed a narrowing decline in exports. But the government warned the trading environment outside the city would remain challenging, given slow global economic growth and headwinds from an impending US interest rate lift-off. Exports fell for 12 consecutive months between November 2008 and October 2009. "The situation isn't as bad as [the financial crisis] in 2008," said Thomas Shik Chun-sing, senior economist at Hang Seng Bank, adding that the latest export figures were better than the market's expectations. He predicted the city's export performance would stop deteriorating in the coming few months, as new mobile phone models are set to hit the streets soon. He said strong demand for such consumer products would give a welcome boost to the export sector, and forecast that Hong Kong's total exports would rise 2 per cent for the full year. "Local exporters may benefit from the mainland's recent move to devalue the yuan," Shik said. But Ryan Lam Chun-wang, head of research at Shanghai Commercial Bank, raised concerns the mainland's likely slowing growth would take its toll on the city's export industry. "There aren't many bright spots in the export sector," he said. Market-watchers say declining exports, coupled with weakening retail sales and a volatile stock market, have weighed on the city's economy. Citibank revised down its Hong Kong economic growth forecast for next year from 3 per cent to 2.8 per cent. Financial Secretary John Tsang Chun-wah reiterated yesterday that the city's financial system was in sound condition, given the stock market roller coaster of late.