Hong Kong Unemployment Rises to Highest in Nearly Decade
Hong Kong Unemployment Rises to Highest in Nearly Decade
(Bloomberg) -- Hong Kong’s jobless rate rose for a sixth straight month in March to the highest level since October 2010 as restrictions to control the coronavirus outbreak continue to pressure the city’s battered economy.
The unemployment rate increased to 4.2% for the January-to-March period, higher than the median estimate of 4.0% among economists surveyed by Bloomberg. The jump extended the longest stretch of increases since the aftermath of the global financial crisis. The underemployment rate climbed to 2.1%, the highest in almost a decade.
Year-on-year declines in total employment and the labor force widened further to 3.6% and 2.2% respectively, both the highest on record, the government said in a release.
“The labor market will continue to face significant pressure from the economic fallout arising from the pandemic in the near term,” said Law Chi-kwong, secretary for Labour and Welfare, in a government statement. “Some specific measures, in particular the employment support scheme and various types of support for specific sectors, should help keep workers in employment.”
Unemployment in consumption and tourism-related industries including retail, accommodations and food services rose to a combined 6.8%, the highest since 2009. Joblessness specifically in the food and beverage service industry climbed to 8.6%. Unemployment in construction, transportation and education also jumped, the government said.
In a blog post Sunday, Financial Secretary Paul Chan said the city’s unemployment and underemployment rates are expected to accelerate as political unrest and the coronavirus outbreak have stalled retail, tourism and many service industries. Visitor arrivals have plummeted almost 99% while small business sentiment hovers near a record low.
“Companies are under tremendous pressure, and the impact on the job market is continuously deepening,” Chan said in translated comments from his Chinese-language post.
An HK$137.5 billion ($17.7 billion) round of stimulus recently announced by the government, which includes a job security program to subsidize wages of affected workers, has been approved by legislators and will alleviate to some extent the rate of increase in joblessness, Chan said.
Banks are starting to accept applications for a 100% government guaranteed low-interest loan first proposed in the February budget, he said.
The Hong Kong Monetary Authority announced Friday a pre-approved program for small and medium-size enterprises that will allow businesses to defer for up to six months loan principal payments due between May 1 and Oct. 31. Borrowers with annual sales of HK$800 million or less, estimated to account for more than 80% of all corporate borrowers in the city, are eligible for the program, the HKMA said in a statement.
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