FS says strong GDP growth won’t revive job market

Financial Secretary Paul Chan said on Wednesday that the GDP for the first quarter in the year will show “pretty strong growth”, but warned that unemployment rate will probably remain high until cross-border travel resumes.

A formal announcement on the growth figure will be made next week.

Chan made his comment after the HK$120 billion counter-cyclical budget was passed in Legco with 40 votes for, one against and one abstention.

Chan said the fact that the economy contracted by nine percent during the same period last year means there will be a relatively strong positive growth this year by comparison.

The official added the gradual recovery in local consumption and “impressive improvement” in trade markets overseas also helped boost the economy.

But he said the GDP improvement may not translate into a marked decrease in the unemployment rate, which stood at 6.8 percent in March and was slightly down from the 17-year-high of 7.2 percent in February.

The financial chief said the employment situation would depend on whether cross-boundary travel could resume, and university students graduating in the summer would also put pressure on the jobless rate. .

“Because at the end of the day, Hong Kong is a very small open economy. Domestic consumption [alone] would not be able to sustain enough strong growth for us,” he explained.

“We need to continue with external trade. We need… quality tourism to come back. This takes time.”