Hong Kong's April retail sales saw another sharp decline. Hong Kong retail sales started to decline in February 2014 and, with very few flattish months, have been declining ever since. Inbound tourism flows both from the mainland and globally started to decline in June 2015 and have remained negative ever since.
HSBC Global expects both retail sales and inbound flows to halt their slide in H2 2016 as Chinese may start to return! Chinese travellers fearful of threats to travel in Europe are staying closer to home and also following the surge in the JPY, Japan is losing out to Korea and Hong Kong as price arbitrage favours them. Shopping in Hong Kong may start to benefit from greater brand diversity and an improvement in transport as well as cultural infrastructure, adds HSBC
“While a rebound is unlikely in our view over the short term, the second derivative of growth is clearly going in the right direction,” said HSBC Global in a report.
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