Coronavirus: Hong Kong faces new unemployment high, but finance chief warns worse may follow Lunar New Year

Paul Chan issues dire predictions for city’s economy, with unemployment and business closures rampant

Amid gloomy prospects, ray of light for florists as government decides Lunar New Year flower fairs can go ahead in traditional format, subject to curbs

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Retailers are among those Hong Kong businesses closing for good during the Covid-19 crisis. Photo: Winson Wong

Published: 5:06pm, 17 Jan 2021Updated: 7:53pm, 19 Jan 2021

Hong Kong’s finance chief has warned unemployment will reach a new high in official figures set to lay bare the full-year impact of the coronavirus pandemic, as he predicted worse could be in store for the economy.

Paul Chan Mo-po’s grave assessment coincided on Sunday with the government deciding to press ahead with next month’s Lunar New Year flower fairs at their traditional locations, following an outcry from florists over the original plan to confine the markets to lower-profile sites.

Chan wrote on his official blog on Sunday that the unemployment rate between October and December last year would surpass the current 16-year-high of 6.4 per cent – which amounted to nearly 260,000 people – when fourth-quarter data is published on Tuesday.

This year’s Lunar New Year flower fairs will be held at their usual locations after florists objected to being moved to less-prominent parts of the city. Photo: Nora Tam

Referring to an increase in bankruptcies and company closures, he said battling Covid-19 for nearly a year had taken a huge toll on businesses, which were repeatedly made to shut their doors or reduce operating hours to guard against infections.

“These extensive restrictions have exerted considerable pressure on the economy and people’s livelihoods,” Chan said, adding many businesses were hanging by a thread.

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