Hong Kong's Unemployment Rate Nears 17-year High

Unemployment in the SAR rose to seven percent in the three months ending last month – the highest rate in almost 17 years, the government announced on Thursday.

The latest unemployment rate was 0.4 percentage points higher than the quarter ending in December.

About 7,500 people lost their jobs during the period, while the workforce shrank a quarter of a percent from the previous three-month period.

The food and beverage sector was among the worst affected, with unemployment rising to 14.7 percent as the pandemic forced many businesses to close.

The overall underemployment rate also went up, from 3.4 percent to 3.8 percent.

Labour Secretary Law Chi-kwong warned that the labour market would remain under pressure in the near term despite an easing of the local epidemic situation, as businesses take time to recover.

A co-director of the International Business and Chinese Enterprise Programme at the Chinese University, Simon Lee, said he had expected the jobless rate to hit seven percent later.

"I think it's because of the severe impact of the fourth wave [of coronavirus infections]," he said, explaining that the catering sector had missed out on their prime business season between December and January, when people dine out to celebrate Christmas and the New Year.

"Now all golden opportunities are gone now, so it's given rise to the sharp increase in the unemployment rate," he said.

He warned that the worst is yet to come, forecasting that the unemployment rate could go as high as 7.5 percent before the borders reopen.

"For other countries, they can make use of domestic travel to stimulate the economy, but Hong Kong, we cannot, the domestic travel is a very small market," he said.

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