Hong Kong’s retail sales continued to enjoy solid growth in December, leaping 23.4 percent from a year ago, the government said on its website Thursday. Again, the momentum was underpinned by vibrant tourist spending and local demand that is still resilient.

The latest Census & Statistics Department figures show that total retail sales in December was HK$43 billion from the same month a year earlier, following a 23.4 percent gain in November.

After stripping out price changes over the same period, retail sales were up 17.1 percent in December in volume terms versus the same month a year ago, accelerating from 16.9 percent growth in November.

For 2011 as a whole, retail sales rose by 24.8 percent in value terms and 18.4 percent in volume terms.

“Retail sales maintained strong momentum throughout 2011, on the back of buoyant local consumption and tourist spending,” a government spokesman said on Wednesday.

The spokesman is upbeat about the near term outlook for the city’s retail businesses, citing income growth and “the prevailing strength of inbound tourism”.

The December figures are encouraging as they indicate that consumers are still spending despite the dim outlook in the overall economy.

Hong Kong’s economy expanded 3 percent year-on-year in the fourth quarter of 2011, slowing sharply from 4.3 percent growth in the previous quarter. Financial Secretary John Tsang forecasted that the economy will decelerate significantly to a muted 1-3 percent growth in 2012, down from 5 percent last year due to slackening external demand. But the domestic sector, which has held up well so far, is expected by the financial secretary and many others, to provide some cushion to soften the blows from the export slump.

However, as Hong Kong’s growth outlook is increasingly clouded by the worsening global economy, domestic consumption may find it hard to stay intact.

Hong Kong Retail Management Association’s Chairperson Caroline Mak said in a conference call on Thursday that it is unlikely Hong Kong’s retail sales will grow at the same pace in 2012 as it did in the past three years.

Hang Seng Bank’s projection on the city’s retail sales in 2012 was an increase of 14 percent, according to a note that the bank released last month.

The fact that private consumption growth was down to 0.4 percent in the fourth quarter of 2011 from 2.1 percent in the third quarter is just one sign that “domestic demand is finally catching up with external weakness”, Kevin Lai, an economist with Daiwa Capital Markets, cautioned in a research noted issued on Wednesday.

Inbound tourism, which has been hugely supportive of retail businesses in the city, is likely to lose some of its buoyancy.

The visitor arrivals’ growth to the city has shown clear signs of slowing lately. Reflecting the drop in tourist numbers and a weakening of their spending trend, local jeweler Luk Fook’s Hong Kong and Macao shops recorded worse-than-expected low single digit sales during the Spring Festival holiday season.

emmaan@chinadailyhk.com