As Hong Kong approaches the Christmas season, the local economy is grappling with persistent challenges, particularly in the retail sector. Retail sales have now fallen for eight consecutive months, with a notable 2.9% year-on-year decrease in October 2024, bringing total sales to HK$32.9 billion (US$4.2 billion) [11a8947d]. This decline follows previous drops of 6.9% in September, 10% in August, and 11.7% in July, marking a significant downturn since the steepest decline of 14.7% recorded in April 2024 [11a8947d].
Categories such as jewelry and apparel have been particularly hard hit, experiencing declines of 11.1% and 9.8%, respectively. However, there has been a silver lining with electrical goods sales surging by 17.1% during the same period [11a8947d]. The Hong Kong government has revised its GDP growth forecast to 2.5%, down from an earlier estimate of 2.5% to 3.5%, following a disappointing third-quarter growth rate of 1.8% [85f5fefd].
In light of these economic hurdles, the Airport Authority of Hong Kong remains optimistic about the holiday season, predicting that visitor numbers will return to pre-pandemic levels by Christmas. Currently, passenger volumes at the airport are at 85-90% of pre-pandemic levels, with 4.92 million passengers handled in August 2024, marking a 23% increase from August 2023 [caf42f41]. This influx of tourists could provide a much-needed boost to the local economy, even as retail struggles to recover.
To attract shoppers and enhance the festive spirit, the WinterFest Christmas campaign was launched on November 22, 2024. This initiative includes various festive activities, such as the 'Christmas Dream Factory' at the Ngong Ping 360 cable car, running from November 18 to January 1 [caf42f41]. Additionally, Sun Hung Kai Properties is celebrating the 40th anniversary of New Town Plaza with special events aimed at drawing in holiday shoppers.
Economists remain cautious, predicting that while the decline in retail sales may narrow, consumer sentiment is still low. Financial Secretary Paul Chan Mo-po has noted a 1.4% year-on-year decrease in private consumption expenditure, indicating that many consumers may not be in the holiday spirit this year [2f6fdb57]. The authorities express optimism due to the resumption of multiple-entry visas for Shenzhen residents, which could further stimulate retail activity [11a8947d]. As Hong Kong navigates these economic challenges, the focus will be on balancing the decline in retail with the potential growth in tourism and exports, which have shown resilience with a 10.7% increase in exports during the same period [2f6fdb57].