Hong Kong retail spending plunges to 17-year-low as visitors decline and yuan weakens

With retail sales in Hong Kong plummetting to a 17-year-low, experts have called on the government to take action to better predict tourist spending habits.

The city’s retail sales totalled HK$436.6 billion at the end of 2016, down 8 per cent compared to 2015, government figures released Friday showed. It marked the biggest drop in consumer spending since 1999.

Continuing a sustained decline in consumer spending in the city, retail receipts totalled HK$42.4 billion in December alone – a 2.9 per cent drop year-on-year.

But it wasn’t all bad news, as total sales in the fourth quarter were up 2.3 per cent on the third quarter, and December’s year-on-year sales decline narrowed compared with previous months, reflecting a revival in tourist arrivals that month, a government spokesman explained.

“Looking ahead, the near-term outlook for retail sales business will still depend on whether the recent improvement in inbound tourism could gain more traction and the extent to which local consumer sentiment would be affected by various external uncertainties,” he said.