Hong Kong’s jobless rate will drop noticeably due to sharp rebound in economy, easing of Covid-19 situation, finance minister says
- Paul Chan hopes unemployment and underemployment rates will fall sharply after city’s economy expanded by 7.9 per cent year on year in the first three months of 2021
- Jobless rate dropped to 6.8 per cent in the first quarter of this year, but still hovered around a 17-year high, with about 259,800 people unemployed
Hong Kong’s high jobless rate will drop noticeably on the back of a sharp rebound in the economy and the easing of the local Covid-19 pandemic situation, the city’s finance minister has said.
Writing on his official blog on Sunday, Financial Secretary Paul Chan Mo-po revealed there would be a marked improvement in the latest unemployment rate – set to be announced on Thursday – as the city’s fourth wave of Covid-19 infections had been largely brought under control.
“Earlier, Hong Kong’s jobless rate dropped to 6.8 per cent from a new high of 7.2 per cent. We can predict that along with the continuous improvement in the economy and the pandemic, the soon-to-be-announced unemployment and underemployment rates will fall markedly,” he said.
The city’s unemployment rate fell to 6.8 per cent in the first quarter of this year, but continued to hover around a 17-year high, with about 259,800 people out of jobs. Roughly 148,400 people were underemployed in the first quarter of the year, with that rate falling to 3.8 per cent, down 0.2 percentage points from the previous three-month period ending in February.
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The jobless rate in the retail, accommodation and food service sectors declined to 10.7 per cent between January and March, while the figure for the food and drink industry alone dropped to 13.3 per cent. The unemployment rate also declined noticeably in the health services sector.
Hong Kong’s economy expanded by 7.9 per cent year on year in the first three months of 2021, the city’s biggest jump in quarterly growth in 11 years, marking an end to a recession that dragged on for 18 months.
It also reflected a V-shaped rebound in gross domestic product after a record 9.1 per cent contraction during the same period last year.
However, Chan warned the sustainability of the improvement in the sluggish labour market would hinge on containing the pandemic.
By the end of this year, there’s a chance the jobless rate will fall below 6 per cent
“As to whether the labour market could improve persistently, or even trigger a rise in workers’ salaries … it hinges on whether the pandemic can be effectively put under control,” he said.
Chan urged Hongkongers to take part in the city’s inoculation drive and to encourage their families and friends to also get jabbed.
Chinese University economist Terence Chong Tai-leung estimated the new jobless rate might fall to 6.5 per cent, as the relaxation of various social-distancing measures would further boost local employment.
Among the latest measures is a multi-tiered “vaccine bubble” launched in late April that allows longer dine-in service hours and permits bars to reopen after months of closures, but operators must ensure staff and patrons have received at least one shot of vaccine.
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“There is a high chance that the unemployment rate may go down to 6.5 per cent,” Chong said. “As social-distancing measures have been eased, especially for the food and drink industry, more jobs will be provided in related sectors.”
With more people getting vaccinated, Chong said he believed “the worst is over” for the city’s labour market.
“I don’t think the government will tighten the measures again, given more people are getting jabbed. By the end of this year, there’s a chance the jobless rate will fall below 6 per cent,” he said.
