Unemployment will continue to rise this year, but at a much slower rate than last year as the economy begins to stabilise, experts have predicted. They said the latest unemployment rate - to be announced by the Government tomorrow - will reach 6.2 to 6.4 per cent for the three months to March, from six per cent for the three months to February. Economists said the jobless rate this year would remain at a two-decade high but would not match the pace of last year when it shot up from 2.5 per cent in January to 5.9 per cent in December. Chi Lo, an HSBC senior international economist, said the stabilising property market, rise in the stock market and reduced interest rates were signs the economy was recovering. He expected the unemployment rate to stand at 6.4 per cent in March, peak in the second quarter at 6.5 per cent and begin tapering off to 5.8 per cent at the end of the year. Few mass lay-offs were expected for this year, Mr Lo said, although there would still be job losses in trading companies, financial firms, restaurants and the retail sector. 'We'll continue to see company restructuring but job losses won't be as great as last year,' Mr Lo said. Denise Yam Wing-yan, an economist with Morgan Stanley Dean Witter, predicted an even slower rate of growth in unemployment. She expected the March jobless rate to exceed no more than 6.2 per cent and the year-end rate to be 6.5 per cent. However, she and her colleagues believe unemployment will continue to rise into next year, peaking at seven per cent by the end of next year. 'Many people say the rate will peak this year and decline next year, but we think it will keep climbing into next year because investment has dropped in the past year,' Ms Yam said. She agreed companies that needed to carry out mass lay-offs or shut down had already done so, but she said the unemployment problem was not a short-term, cyclical problem. New job-creating industries were needed since manufacturing jobs began moving to the mainland in the 1980s. 'At that time, no one bothered because a lot of people were absorbed into the property and stock markets and many jobs were popping up from overseas trade with the mainland,' Ms Yam said. 'But this recent economic downturn has made Hong Kong realise the imbalances of the past. There were too many people in the property and stock professions.' What the Government needed to do now was find a niche for Hong Kong to grow in the long-term, Mr Lo said. Wong Kwok, a senior researcher at the Federation of Trade Unions, said many laid-off workers were still finding it difficult to secure jobs. 'Companies now even request basic English skills from office tea and cleaning ladies,' Mr Wong said.