This will likely result in limited purchasing power for Hong Kong consumers.
Rising inflation levels is likely to weigh on Hong Kong’s consumer outlook for 2018 as private final consumption growth is expected to moderate to 3.5%, according to BMI Research.
This will likely result in limited purchasing power as Hong Kongers also registered lower levels of consumer confidence which hit 64.1 in the second half of 2017 – well below the highs in the 80-90 range witnessed in Hong Kong’s consumer heyday from 2005 to 2008.
The consumption slowdown comes amidst overall expectations of a decelerating economy which is poised to dip to 3% in 2018 down from 3.7% in the previous year.
“Lower levels of consumer confidence comes on the back of Hong Kong's slower economic growth trajectory and inflation, which will constrain consumer optimism,” said BMI Research.
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