Hong Kong's March retail sales fell 7% from a year earlier, partly due to a high base of comparison for visitor spending and the Easter holidays, government data showed on Friday.

Sales decreased to HK$31.2 billion ($3.99 billion), snapping 15 consecutive months of growth. That compared with a 1.9% rise in February.

"The changing consumption patterns of visitors and residents may continue to pose challenges," a government spokesman said.

Hong Kong visitor arrivals are increasing following the pandemic lockdown, helping to drive 2.7% growth

in the local economy in the first quarter. Although arrivals are increasing there are signs tourists are spending less.

The government's efforts to promote a mega event economy, a further revival in inbound tourism and rising household income should help to support the retail sector, the spokesman said.

In volume terms, retail sales decreased 8.6% year-on-year in March, compared with a 0.5% growth in February.

For the first quarter of 2024, total retail sales decreased by 1.3% compared with the same period in 2023, while the volume of total retail sales fell 3.1%, according to provisional estimates.

March visitor arrivals stood at 3.4 million, up 38.6% from a year ago period, data from the Hong Kong Tourism Board showed. That compared with 4.0 million in February, 3.83 million in January.

The number of mainland Chinese visitors stood at 2.46 million in March, up 24.9% from the same period in 2023. That compared to February's 3.25 million and January's 2.98 million.

Sales of jewellery, watches, clocks and valuable gifts fell 17.7% in March on year after a 3.6% decline in February.

Sales of clothing, footwear and accessories dropped 16.7% in March after an increase of 12.3% in February.

The government also said a longer period of tight financial conditions may dampen economic confidence and activities. ($1 = 7.8160 Hong Kong dollars) (Reporting by Donny Kwok; Editing by Timothy Heritage and Sharon Singleton)