The latest figure was a 35 percent increase over the 646 recorded last May. It was also the highest monthly figure since April 2022, when 930 bankruptcy filings were filed.
In the first five months of the year, 3,797 bankruptcies were registered, an increase of 25 percent compared to 3,031 registered in the same period of 2023.
But the number of bankruptcy orders fell to 624 in May from 859 in April, a 38 percent drop, after rising from 641 cases in March, according to the office.
The number of petitions for mandatory business closures reached 61 in May, slightly down from 66 last month, after 69 in March.
The number of petitions in May was also double the 33 registered in the same period last year.
The Office of Financial Services and the Treasury said the figures should be viewed from a macro perspective and “do not actually reflect the overall economic trend and economic reality”.
The bureau cited data from April and May, saying monthly figures for personal bankruptcy and company closures can fluctuate even within the same quarter.
“One cannot accurately assess the current situation of Hong Kong’s economy based only on the rise and fall of individual monthly figures,” the bureau said in a social media post.
“In fact, a comprehensive analysis of various economic indicators shows that Hong Kong’s economy is steadily improving and showing a momentum of recovery.”
The bureau pointed to the latest unemployment rate between March and May, which stood at 3 percent, as well as gross domestic product (GDP) that rose 2.7 percent, year-on-year, in the first quarter.
It was confident the retail and tourism sectors would recover, forecasting visitor numbers to rise 35 percent to 46 million in 2024 compared to 2023, boosting revenues and stabilizing the capital market, it said. the bureau.
“Hong Kong’s economic performance, including GDP growth, unemployment rate, exports, retail sales and tourism, all show that the economy is steadily improving,” the statement said.
Professor Terence Chong Tai-leung, executive director of the Chinese University of Hong Kong’s Lau Chor Tak Institute of Global Economics and Finance, said the rise in bankruptcy filings could be linked to banks pulling back on loans.
“Growth is more likely to come from personal investment,” he said. “I believe individual investors had bought commercial properties, but they fell over 40 to 50 percent in value, so the bank could pull the loans and they could be forced to file for bankruptcy.”
He added that the rise in numbers was unlikely to be related to the unemployment rate – which remained low – and people not being able to pay their mortgages, unlike in previous financial crises.
Simon Lee Siu-po, an honorary fellow at the Asia-Pacific Business Institute at the Chinese University of Hong Kong, said high interest rates in the past two years were the main reason individuals went bankrupt.
He added that the economic recovery in sectors such as retail trade and the sector was still slow.
The Hong Kong Monetary Authority warned last week that high interest rates could continue for some time after the United States Federal Reserve’s latest rate decision.
The city’s de facto central bank said recent economic data showed mixed signs and inflation remained high, making the current interest rate environment “long for some time”.
The authority kept the key rate unchanged for a seventh time at 5.75 percent last Thursday, following the Fed’s decision to keep its target rate in the range of 5.25 to 5.5 percent, the highest level in 23 years.
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