As Hong Kong approaches the Christmas season, the local economy is facing significant challenges, with retail sales continuing to decline. The Hong Kong government recently revised its GDP growth forecast to 2.5%, down from a previous estimate of 2.5% to 3.5%, following a disappointing third-quarter growth rate of 1.8% [85f5fefd]. The retail sector, which is crucial for the economy, saw sales drop by 6.9% year-on-year in September 2024, with an overall decline expected to remain in the low double digits for the year [dd6dd9be].
Despite these economic hurdles, the Airport Authority of Hong Kong is optimistic about the upcoming 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.
In an effort to attract shoppers and enhance the festive spirit, the WinterFest Christmas campaign is set to launch 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]. 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].