Unemployment rate hits 9-year high in Hong Kong
Having been driven into recession after months of political unrest, the Hong Kong economy took a further blow with the unemployment rate in the Asian financial hub hitting 3.7% in February, the highest recorded figure since January 2011.
Official figures released by Hong Kong’s Census and Statistics Department showed the unemployment rate rose 0.3% for the three months to February, from 3.4% for the November to January period. Total employment fell by about 0.9% or 34,400 to 3.77 million from December to February, while the labour force shrank by around 0.6% or 22,500 to 3.9 million.
The underemployment rate from November to January also went up from 1.2% to a five-year high of 1.5% in December to February, with increases mainly seen in the construction, transportation, retail, accommodation and food services sectors.
Attributing the deterioration in the labour market to the COVID-19 outbreak, Dr Law Chi Kwong, Hong Kong’s Secretary for Labour and Welfare, warned of tougher times ahead, “The labour market will be subjected to even greater pressure in the near term, and the exact impact will hinge on the duration and severity of the pandemic around the world.”
He also highlighted the widening of the year-on-year decline in total employment to 2.5%, the largest since the Asian financial crisis. “The decline in labour force also enlarged in parallel, suggesting that some people chose to leave the labour force upon losing their jobs.”
To compound matters, Hong Kong has seen Singapore overtake it as the world’s freest economy. The Heritage Foundation’s 2020 Index of Economic Freedom report, which was released this month, gave Hong Kong a score rating of 89.1, placing it below Singapore (89.4) for the first time since 1995.
“Hong Kong’s economy was rated the freest in the world from 199 through 2019. The ongoing political and social turmoil has begun to erode its reputation as one of the best locations from which to do business, dampening investment inflows,” explained the Heritage Foundation.