Retail sales in July rose 1.8 percent year on year to an estimated total of HK$29.7 billion, the Census and Statistics Department said on Monday.

It was lower than market expectations of a 2.5 percent increase, but higher than the revised 0.7 percent growth in June.

Taking the first seven months of the year together, retail sales declined 2.6 percent compared to the same period last year.

Sales of books, newspapers, stationery and gifts in July increased the most, by 20.5 percent year on year.

This was followed by sales of Chinese drugs and herbs, which advanced 19.6 percent from the same month last year, while the value of sales of commodities in supermarkets rose by 0.2 percent.

However, sales of motor vehicles and parts declined 12.4 percent and fuels by 10.3 percent year on year.

A government spokesperson said retail sales "continued to stabilise" in July, with the pace of growth "slightly faster" than in the previous month.

"Looking ahead, local consumption sentiment should remain steady, the government's proactive efforts in promoting tourism and mega events will also benefit retail businesses," the spokesperson added.