Hong Kong's unemployment rate fell to 6.80% in March from 7.20% in February, according to the Census and Statistics Department. The consensus forecast had been for 7%.
The number of people out of work fell from a 17-year high as the economy emerged from its pandemic slump, the statistics show.
The fall is the first since November, according to a government report Thursday. The underemployment rate also fell to 3.8%.
The government accredited a gradual easing of coronavirus restrictions - which would help accelerate the economy after an extended recession that began before the pandemic. Hong Kong chief executive Carrie Lam said the worst seemed to be over - with the economy likely to see growth of about 3% to 5% for the full year.
Hong Kong continues to combat the virus. However, many citizens are skeptical of vaccinations. There have also been obstacles in starting up a Hong Kong-Singapore travel bubble. The city also banned flights from India, Pakistan and the Philippines for 14 days earlier this week because of the spread of virus variants, according to a Bloomberg News report Thursday.
"With day-to-day activities in Hong Kong now mostly back to normal the near-term (economic) outlook hinges on whether Chinese visitors return," Capital Economics said in an Asia analysis this week.
"Domestic demand had mostly returned to pre-pandemic levels before it was derailed again by a fourth wave of infections. This has now been brought under control, and mobility is nearly back to its pre-crisis level. A faster pace of vaccination should reduce the risks of further outbreaks. Meanwhile, tailwinds from strong export demand and fiscal easing will fade, but not precipitously," Capital Economics said.
"The main weakness is the retail sector, as mainland shoppers have not returned. They initially stayed away when the 2019 protests broke out. But with dissent quashed by the National Security Law, they will probably start to return as soon as China drops its requirement that all returnees do not have to quarantine," it said.
