Paul Chan: Unemployment rate may hit record high and worsen after CNY

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Financial Secretary Paul Chan Mo-po wrote on his blog on Sunday that Hong Kong's unemployment rate is expected to climb to 16-year high as the city remains under the influence of the fourth wave. He warned that the situation may be exacerbated further after the Chinese New Year. 

The exact figures of unemployment and underemployment rate will be released later today. 

Chan wrote that companies and the labour market are still under pressure, despite a brief sign of economic recovery in the third quarter last year. There was a 6.6% increase in bankruptcy applications compared to the year before. About 450 companies filed for compulsory winding-down in 2020, a 4-year high. 

Affected by the pandemic, the Chinese New Year period, which is traditionally the peak season for the retail and catering industry, could bring merchants to their knees. Chan warned that if the pandemic is not contained soon enough, there will be more business closure and layoffs after the festive holiday. 

The government, who originally proposed cancelling the annual Lunar New Year flower markets at traditional major venues on Sunday, rescinded its decision yesterday due to a strong backlash, one day after Chan's article.