Hong Kong, August 30 (ANI): Hong Kong’s economic situation has seen a notable downturn in the second quarter of this year, with residents’ earnings and employment figures reflecting increased financial strain, reported South China Morning Post (SCMP).
According to the “Quarterly Report on General Household Survey” released on Thursday by the Census and Statistics Department, the median monthly income for residents declined by HK$300 (US$38), from HK$21,400 in the first quarter to HK$21,100 in the second quarter. This marks a significant drop in income amidst ongoing economic challenges.
For approximately 2.8 million households, the median monthly income decreased by HK$700, from HK$30,000 to HK$29,300. This data does not include foreign domestic helpers, highlighting a broader trend of economic pressure on local residents.
A study released by the UK-based consultancy WTW revealed that nearly 40 percent of Hong Kong companies have reduced their payroll budgets for the financial year ending in March, a substantial increase from the 21 percent reported a year earlier. This reduction is indicative of widespread financial caution among businesses in the region, reported SCMP.
Additionally, a survey conducted in May by the Hong Kong Small and Medium Enterprises Association and Junior Chamber International Hong Kong found that 70 percent of small and medium enterprises (SMEs) reported business levels falling below pre-pandemic norms.
This underscores the ongoing difficulties faced by the SME sector, which has struggled to recover fully from the economic impacts of the COVID-19 pandemic.
The official statistics also showed that while the labour force grew by 8,900 to 3,474,400, unemployment surged to 114,700 in the second quarter, an increase of 3,000 from the previous quarter. The construction, retail, accommodation, and food services sectors were hit hardest, with unemployment rates in these sectors significantly surpassing the overall average rate of 3 percent.
Furthermore, the number of underemployed residents increased by 4,500, reaching 44,500 during the same period. Underemployment, where individuals are working fewer hours than desired, reflects the broader issue of economic instability, as reported by SCMP.
The city has seen a wave of closures across various sectors, including shops, restaurants, and cinemas, contributing to the economic downturn. In response to these challenges, the Hong Kong Monetary Authority recently established a task force to support small and medium-sized enterprises (SMEs) struggling with loan repayments.
Chief Executive John Lee Ka-Chiu acknowledged the economic difficulties but expressed a positive outlook, stating that the transition of old businesses being replaced by new ones is a normal economic process. He projected that the economy could see improvements in the coming year.
The economic challenges in Hong Kong reflect a complex interplay of local and global factors, including the ongoing effects of the pandemic and broader economic uncertainties. (ANI)
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