Hong Kong's retail sales in January climbed 23.3 percent, the fastest pace in almost a year, as people stocked up ahead of the Lunar New Year holiday.

Sales rose to HK$25.7 billion (US$3.3 billion) in January from a year earlier, the government said yesterday, after gaining 16.9 percent in December.

Hong Kong's consumer spending has been buoyed by a jobless rate at a nine-year low, rising property prices, interest-rate cuts, record tourist arrivals, and tax relief, Bloomberg News said.

The timing of the holiday, in early rather than late February, helped bring sales forward. "The holiday fell at the beginning of February and that helped boost retail sales in January," said Michael Dai, senior economist at Bank of China (Hong Kong) Ltd. "Domestic consumption has been strong on the housing market, salary increases, and tax and interest-rate cuts - the desire to spend is there."

Financial Secretary John Tsang announced tax cuts last week along with a forecast HK$115.6 billion annual budget surplus. The government scrapped wine and beer duties, pledged to cut salary and profit taxes, waived property rates and subsidized household electricity.

"The tax relief will likely boost domestic consumption in Hong Kong, providing some cushion against the unfolding global slowdown," said Wang Qian, an economist at JPMorgan Chase & Co in Hong Kong.

HSBC Holdings Plc, Standard Chartered Bank Plc and other lenders have cut borrowing costs six times since September. The jobless rate, at 3.4 percent, is the lowest since March 1998.

Tourist inflows help sales at companies such as Sa Sa International Holdings Ltd, Hong Kong's largest cosmetics retailer.

Hong Kong's economy grew 6.7 percent in the fourth quarter from a year earlier, the fastest pace in 21 months, on consumer spending and investment. By volume, retail sales rose 17.4 percent in January from a year earlier, after climbing 12.5 percent in December.