Pedestrians wearing protective masks walk along a street in Central, Hong Kong, on Sept 23, 2020. (BILLY H.C. KWOK / BLOOMBERG)

HONG KONG - Hong Kong's retail sales increased for a second straight month in June as the pandemic situation in the city abated.

Retail sales in June were provisionally estimated at 28.1 billion Hong Kong dollars (about US$3.6 billion), up 5.8 percent year-on-year, slightly slower from the 10.4 percent growth in May, the Census and Statistics Department of the Hong Kong Special Administrative Region government said Monday.

Local consumption demands revived further alongside the stable local epidemic and improved market situations, a government spokesman said

Retail sales in the second quarter saw a 3.6 percent increase over the first three months after a seasonal adjustment. However, the performance fell far short of pre-recession levels as consumption remained sluggish due to the slump in the number of visitors.

Sales of motor vehicles and parts saw the strongest growth, with a 36 percent year-on-year increase in June. This was followed by luxury goods, including jewelry, watches, clocks and valuable gifts, which rely heavily on mainland tourists. Sales in the category jumped 31.8 percent.

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The government has launched a Consumption Voucher Scheme, distributing electronic consumption vouchers worth HK$5,000 to eligible Hong Kong residents. A government spokesman said the scheme will help stimulate local consumer sentiment and provide support to the retail sector.

It is essential for the community to strive for a higher vaccination rate in the city and keep the pandemic under controlto create favorable conditions for a more visible revival of the retail trade and a broader based economic recovery, the spokesman added.

Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, said that although consumer sentiment was weak in July, the consumption voucher program will support the retail industry by further stimulating local consumption.

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It is also estimated that more than half of the total retail sales in August will come from the consumption voucher, and retail sales will see a boost in the second half of the year. 

With inputs from Xinhua