HONG KONG (Reuters – Hong Kong retail sales jumped 11.7% to April from a previous year, ending two consecutive months in decline. This rebound was made possible by a receding COVID epidemic and disbursement government’s consumption vouchers.

Retail has suffered from pressure, especially after financial hub placed stringent restrictions on coronavirus prevention. However, the government anticipates that the sector will recover as the number of cases decreases and the measures are relaxed.

Official data on Wednesday revealed that April retail sales rose 11.7% to HK$30.2 trillion ($3.85 billion) from a year ago. It follows a 3.8% decline in March.

A government spokesperson stated that “The retail sector must continue to recover, provided that the local epidemiological situation remains stable”. He also added that government support would be more effective through a voucher program and other measures.

Volume terms, April retail sales increased 8.1% over a year ago, while March saw a decline of 16.8%.

Retail sales volume decreased 6.1%, and the value fell by 3.1% in the January-April period.

Hong Kong implemented the strictest antivirus measures at the beginning of 2011. The Omicron variant caused an alarming spike in viruses, resulting in widespread closings.

The economy of the city contracted by 4% during the first quarter compared to the previous year. This ended four quarters worth of recovery.

In the February-April quarter of 2019, the unemployment rate was 5.4%, which is the highest level since 2021’s April-June quarter.

Hong Kong’s forecast for economic growth in 2022 is now 1%-22%. It was previously 2%-3.5%.

According to data, jewellery, watches, clocks, and other valuable gifts sales, which were heavily dependent on mainland tourists before the pandemic, increased 13.9% in April after a revised 35.9% decrease in March. Due to COVID, the border with China is still largely closed.

The April increase in clothing, footwear, and related products was 1.6%, compared to a March decline of 41.4%.

The number of tourists arriving in April was 4,692, down 17.8% from the previous year. This compares to a March plunge of 73%.

The value of online retail sales rose 34.8% annually in April, after an increase of 31.2% in March.

Hong Kong relaxed its COVID restrictions in May. As cases settled, the city reopened beaches and swimming pool areas and extended bar hours. Restaurants are now allowed to seat eight persons per table instead of four.

($1 = 7.8489 Hong Kong dollars)