HONG KONG (Reuters) - Hong Kong's retail sales fell in February after 12 straight months of growth as a wave or COVID-19 infections hit the city and anti-epidemic measures weakened consumer sentiment and reduced the numbers of people going to shop.
Retail sales in February fell 14.6% from a year earlier to HK$25.2 billion ($3.22 billion), official data released on Thursday showed. That compares with a revised 4% increase in January and a 13.7% fall in last decline in January 2021.
It is the steepest decline since July 2020, during the early months of the pandemic, when sales dropped 23.1%.
"While the local epidemic has shown signs of easing of late, the retail sector will continue to face notable pressure in the near term," a government spokesman said, adding the new round of electronic consumption vouchers in April should provide support to the retail sector.
In volume terms, retail sales in February fell 17.6% from a year earlier, compared with a revised 1.5% growth in January, and was the biggest fall since July 2020, when it dropped 23.8%.
At the start of this year, Hong Kong implemented its most draconian measures as the Omicron variant caused a dramatic spike in infections, and as a result businesses and the city's economy are reeling from widespread closures.
Hong Kong's border has effectively been shut since 2020 with few flights able to land and hardly any passengers allowed to transit, isolating a city that had built a reputation as a global financial and travel hub.
The economy is set to contract in the first quarter, breaking four quarters of recovery, Financial Secretary Paul Chan said on his blog last Sunday.
The seasonally adjusted unemployment rate rose to 4.5% in the December-February quarter, the government said, adding that the outlook is overshadowed by the battle to bring the epidemic under control.
Sales of jewellery, watches, clocks and valuable gifts, which before the pandemic relied heavily on tourists from the mainland, dropped 33.6% in February after 7.1% surge in January, the data showed.
Clothing, footwear and related products plunged 39% in February against a revised 6.2% jump in January.
Tourist arrivals in February dropped more than 52% from a year earlier to 2,626. That compares with a 61.7% jump in January.
At least, online retail sales, measured by value, jumped 50% in February from a year earlier year compared with January's revised 30.7% growth.
($1 = 7.8294 Hong Kong dollars)