Unemployment in Hong Kong hit a near-17-year high of 7% in January, the government announced on Thursday less than a week ahead of the city's annual budget release which will likely include greater support for the jobless as the pandemic continues to ravage the economy.

Another 7,500 people lost their jobs in January, bringing the citywide total to 253,000 or 7% of the population. This is the highest level of joblessness seen in Hong Kong since October 2004 and comes during the longest and hardest pandemic wave to hit the city so far.

"Although the fourth wave of the local epidemic has shown signs of easing lately, the labor market will remain under pressure in the near term as it will take time for economic activities to return to normal," Hong Kong's Secretary for Labour and Welfare Law Chi-kwong said on Thursday.

Workers in the food and beverage industry were hardest hit with unemployment rates nearing 15%, but a relaxation of social distancing measures from Thursday, including later opening hours for bars and restaurants, should bring a measure of relief.

The increase in joblessness is in line with the expectations of Hong Kong authorities, who warned of trying times even as the number of infections lowers.

"There will be challenges in the first half of the year although there will be some improvement," the city's finance minister Paul Chan had said back in January. He is expected to unveil Hong Kong's annual budget on Feb. 24.

So far, government aid to residents hardest hit by the economic effects of the pandemic has been limited to one round of handouts worth HK$10,000 ($1,290).

When asked about the possibility of further assistance, Chan responded by wondering if "we should be preserving some strength for the uncertainties or even greater challenges we have not yet seen."

Hong Kong authorities have been reluctant to promise additional social aid after the first round of pandemic relief measures, originally estimated to cost HK$13.9 billion, ended up costing the government HK$30 billion.