(Bloomberg) − Hong Kong’s January retail sales fell by the most since April 2003 as Chinese tourist arrivals slowed and expenditure in the previous year was boosted by holidays.
Retail sales by value plunged 14.6 percent in January from a year earlier, according to government data released Tuesday. Economists surveyed by Bloomberg News had a median estimate for a 6.1 percent decline.
“The negative impact of slowing Chinese growth on Hong Kong is becoming more obvious,” said Mole Hau, an economist with BNP Paribas SA in Hong Kong. “I don’t think the downtrend of Hong Kong retail sales is going to reverse anytime soon.”
A slowdown in the Chinese economy and President Xi Jinping’s campaign against corruption and extravagance by officials are crimping tourist spending and hurting luxury retailers in Hong Kong. The sale of jewelry, watches and luxury items dropped by 21.4 percent in January from a year ago, the data show.
Mainland Chinese arrivals to Hong Kong rose 3.3 percent in January from a year earlier, compared with a 23.3 percent increase for the same month in 2014, according to Hong Kong Tourism Board data.
“The notable year-on-year decline in retail sales in January 2015 was partly due to the distortion arising from the difference in timing of the Lunar New Year,” the government said today. The Chinese New Year holidays, which traditionally offer a boost to retailers, were in February this year compared with January in 2014.
Still, sales this January were also 2.3 percent below the period in 2013 when the holidays were in February, according to data compiled by Bloomberg.
Hong Kong isn’t the only city suffering from slowing mainland spending. Macau, the only Chinese territory where gambling is legal, said Tuesday gaming revenue almost halved in February from a year ago.