(Bloomberg) -- Hong Kong retail sales posted a surprise gain, rising for the first time in two years as tourism from China rebounded.
Retail sales by value gained 3.1 percent in March from a year earlier, the statistics department said Friday. That compared with a median estimate for a 0.9 percent decline projected by economists in a Bloomberg survey. Retail sales volume climbed 2.7 percent, rising for the first time since July 2015 and defying forecasts for a 1 percent decline.
“Retail sales resumed moderate year-on-year growth in March,” the government said in a statement. “This reflected partly the continued recovery of visitor arrivals and partly the robust local consumption demand.”
Mainland Chinese arrivals to Hong Kong rose 10.4 percent in March from a year earlier, the most since February 2015, tourism board data show. Even so, a recovery in mainland spending in the city has lagged that of Macau, where casino revenue rose for a ninth straight month in April as visitors flocked to the only Chinese territory where gambling is legal.
“China continues to be a major challenge,” said Kevin Lai, an economist at Daiwa Capital Markets in Hong Kong. “The dollar is still too strong. Hong Kong isn't that attractive as a tourist destination. We may get some additional tourists from other countries, but I'm not that positive. We're not talking about a big recovery.”
To contact the reporter on this story: Lisa Pham in Hong Kong at lpham14@bloomberg.net.
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Malcolm Scott at mscott23@bloomberg.net, Jeff Kearns, K. Oanh Ha
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