2.6pc growth forecast in first quarter

Hong Kong's economy is expected to return to growth in the first quarter, rising by 2.6 percent from a year ago, according to the latest forecast by the University of Hong Kong.

Vaccinations and the relief programs are factors in the estimate.

The APEC Studies Programme of the Hong Kong Institute of Economics and Business Strategy at HKU projects that the first-quarter unemployment rate will improve to 6 percent this quarter, from the estimated 6.3 percent in the fourth quarter last year.

HKU also raised its forecast of Hong Kong's 2020 GDP. The economy is expected to contract by 5.8 percent last year, representing a 1.4 percentage points upward revision from the previous forecast.

Real GDP is estimated to drop by 2.6 percent in the second half of 2020, compared with a 9 percent drop in the first half. Real GDP is forecast to drop by 1.7 percent last quarter, a lesser drop compared to the 3.5 percent decline in the third quarter.