Hong Kong’s already struggling retail sector may be hit further as a result of Britain’s vote to leave the EU, according to analysts.
Experts now say they expect tourist numbers to decline and outbound travel to grow on the back of a stronger US dollar and weaker Chinese yuan, meaning less spending here.
Hong Kong retail sales have hit a wall since tourist numbers from the mainland started declining sharply a year ago.
But analysts say the worst may not be over, after the shock decision by Britain triggered global risk aversion, and will continue to push higher the value of US dollar.
“The retail downturn is going to continue,” Morgan Stanley said in its latest snapshot of global reaction to the Brexit, noting Hong Kong’s outbound travel is already growing due to the stronger local currency, which is pegged to the US dollar.
Chinese tourists are also likely to travel elsewhere or spend less in Hong Kong, as the yuan weakens, it said.
(Image credit: Tung Cheung)