Hong Kong logged 783 personal bankruptcy applications last month, a 21% jump and 4-month high

The 2,184 personal bankruptcy applications in the first quarter represented a 20 per cent increase over the same period last year.

The figure for March marked a four-month high since 814 applications were received in November last year.

Simon Lee Siu-po, an honorary fellow at the Chinese University of Hong Kong’s Asia-Pacific Institute of Business, was among those warning worse could be yet to come amid a gloomy economic outlook.

“The pace of the city’s economic recovery has not been as quick as expected,” he said. “Retailing has also been hit by the exodus of Hongkongers spending across the border.”

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Lee said he believed the number of bankruptcies might still rise in the near future, given the continued weak sentiment in the housing and stock markets.

“If broadly held assets such as property and stocks are rising in value, there will not be a big jump in bankruptcies. But unfortunately, both markets have remained dull,” he said. “So I would not be too surprised if the bankruptcy numbers keep going up.”

But bankruptcy lawyer Tang Tat-ming, a partner at Yip, Tse and Tang, said there was no need to be too pessimistic.

“The number is still smaller than 1,000 a month and can be said to be at a normal level,” he said. “According to our cases, many clients are resorting to bankruptcy because of credit card debt. The housing market appears to be staying stable and we do not see a rise in owners of negative assets.”

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Lee warned the outlook would remain dim in the near future and the economy would take longer than expected to fully recover, citing high interest rates.

United States Federal Reserve chairman Jerome Powell earlier this week noted a “lack of further progress” on inflation, and analysts said they believed his comments meant interest rates could remain high for longer.

Lee also expected the city’s jobless rate to continue edging up. The unemployment rate was largely stable at 3 per cent for the January to March period, up 0.1 percentage points compared with the December-February stretch, according to official data. About 111,700 people were jobless, an increase of about 9,400.

The underemployment rate also rose 0.1 percentage points to 1.1 per cent.