HONG KONG Hong Kong's July retail sales rose 16.5% from a year earlier in the eighth consecutive month of growth helped by an increase in visitor arrivals and positive consumption sentiment, the city government said on Thursday.

Sales increased to HK$33 billion ($4.21 billion). That compared with a revised 19.5% rise in June and 18.5% growth in May.

"The revival in inbound tourism should continue to benefit the retail sector in the coming months," a government spokesperson said. "Improved labour market conditions and the government's various measures to support consumption should also help."

In volume terms, retail sales increased 14% year-on-year in July. That compared with a revised 17.4% growth in June and 16.6% growth in May.

However, the city's economic growth slowed to 1.5% in the second quarter from a year ago, and compared with 2.9% growth in the first quarter. The government has revised its growth forecast for this year to 4.0% to 5.0% from a range of 3.5-5.5% earlier.

Preliminary visitor arrivals for July were 3.59 million, bringing the total for the first seven month of 2023 to 16.47 million visitors, according to Hong Kong Tourism Board data, compared with 124,052 in the January-July period in 2022 and 48,048 in July last year.

Among the arrivals, the number of mainland Chinese visitors increased to 2.98 million in July from 2.16 million in June, the data showed. That compared with 40,091 mainland visitors in July last year.

In July, sales of jewellery, watches, clocks and valuable gifts, which before the pandemic were mostly to mainland tourists, surged 19.8% from a year earlier as compared with a 64.4% jump in June, data showed.

Sales of clothing, footwear and accessories in July grew 35.6% on the year after a 33% increase in June.

Online retail sales in July increased 1.4% year-on-year in value terms, compared with a 2.6% drop in June.

($1 = 7.8440 Hong Kong dollars)

(Reporting by Donny Kwok and Twinnie Siu; Editing by xxx)