Worst is over? Hong Kong's jobless rate drops from 7.2% peak

Despite an uneven recovery, the unemployment rate will likely enter a sustained decline, OCBC has said.

Hong Kong’s unemployment rate will likely continue a gradual decline after dropping to 6.8% in March, down from the record 7.2% in February.

Recovery will be uneven across sector and will particularly be challenging for the tourism-related and transportation sector, but OCBC Treasury Research said the jobless rate may have reached its peak.

“In a nutshell, though unemployment rate may not drop sharply given the uneven economic recovery, it may have peaked and is set to edge down gradually,” OCBC said in its daily outlook.

The decline in the jobless rate was led by decreases seen in the consumption and tourism-related sectors as the local outbreak receded and social distancing measures were eased.

The unemployment rate of the consumption and tourism-related sectors fell by 0.4 percentage points to 10.7% in the same period.

“Going ahead, the economy may continue to regain steam given a gradual rebound in external demand and the expansionary fiscal policy including e-consumption vouchers and extension of loan moratoriums,” the report also read.

Social distancing measures may be further relaxed, if the government contains the outbreak. However, border reopening will be unlikely in the first half of the year as vaccine rollout across Asia remains slow.

In addition, Singapore and Hong Kong on Wednesday moved to postpone anew the opening of the air travel bubble.

“This means that the tourism-related and transportation sectors may remain in the doldrums in the near term,” the bank said.

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