Hong Kong’s retail sales fell in February after 12 straight months of growth as a wave of Covid-19 infections hit the city and anti-epidemic measures weakened consumer sentiment and reduced the number of people going to shop.

Retail sales in February fell 14.6 per cent from a year earlier to US$3.22 billion, according to government data released on Thursday. That compares with a revised 4 per cent increase in January and a 13.7 per cent fall in January 2021.

It is the steepest drop since July 2020, during the early months of the pandemic, when sales dropped 23.1 per cent.

“While the local epidemic has shown signs of easing of late, the retail sector will continue to face notable pressure in the near term,” a government spokesman said, adding the new round of electronic consumption vouchers in April should provide support to the retail sector.

In volume terms, retail sales in February fell 17.6 per cent from a year earlier, compared with a revised 1.5 per cent growth in January, and was the biggest fall since July 2020, when it dropped 23.8 per cent.

At the start of this year, Hong Kong implemented its most draconian measures as the Omicron variant caused a dramatic spike in infections, and as a result businesses and the city’s economy are reeling from widespread closures.

Hong Kong’s border has effectively been shut since 2020 with few flights able to land and hardly any passengers allowed to transit, isolating a city that had built a reputation as a global financial and travel hub.

The economy is set to contract in the first quarter, breaking four quarters of recovery, financial secretary Paul Chan said on his blog last Sunday.

The seasonally adjusted unemployment rate rose to 4.5 per cent in the December-February quarter, the government said, adding that the outlook is overshadowed by the battle to bring the epidemic under control.

Sales of jewellery, watches, clocks and valuable gifts – which before the pandemic relied heavily on tourists from the mainland – dropped 33.6 per cent in February after 7.1-per-cent surge in January, the data showed.

Clothing, footwear and related products plunged 39 per cent in February against a revised 6.2-per-cent jump in January.

Tourist arrivals in February dropped more than 52 per cent from a year earlier to 2626. That compares with a 61.7-per-cent jump in January.

At least, online retail sales, measured by value, jumped 50 per cent in February from a year earlier year compared with January’s revised 30.7-per-cent growth.

• Reporting by Donny Kwok and Twinnie Siu; Editing by Simon Cameron-Moore, of Reuters.