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Hong Kong’s retail sales are expected to slump 5 percent to HK$460 billion (US$59 billion) for the full year, dragged down by economic uncertainty and a decline in mainland Chinese tourists, according to international advisory firm PriceWaterCoopers (PwC).
The estimate is a downgrade from its earlier forecast of a 3 percent drop in sales, reflecting a weaker outlook, as government statistics showed first-quarter retail sales falling 2 percent compared to the same period last year.
“The ongoing Sino-US trade dispute, equity market turbulence and volatility of renminbi continue to cast a long shadow on consumers’ sentiment and actual spending,” said Michael Cheng, PwC’s Asia-Pacific consumer markets leader.
Retail sales are often used as an indicator for the performance of an economy. Government data in the previous month have already revealed sluggish economic growth as the US-China trade war continues to affect consumer spending.
In February, retail sales fell by 10.1 percent, the worst fall in almost three and a half years. The first quarter’s gross domestic product growth, at 0.6 percent, was the lowest increase since the third quarter of 2009, while private consumption expenditure was the lowest in about three years at 0.2 percent.
Electrical and luxury goods experienced the biggest decline in sales and are expected to shrink even further, PwC said.