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Nova Credit Announces Estimated Bankruptcy Rate at 0.150% for 2023 Q2

Unemployment slightly down as economic recovery endures

According to the latest macro-economic data (as of 30 May 2023) and the unemployment rate (provisional figures), NOVA announces the latest estimated bankruptcy rate for the next 12 months at 0.150%, which is equivalent to 8,400 bankruptcy cases by the end of May 2024 for 5.6 million credit population in Hong Kong.

This calculation of estimated bankruptcy rate is calculated based on the latest macro-economic data up to 30 May 2023. According to the statistics released by the Census and Statistics Department, the year-on-year percentage change of GDP as of Q1 2023 is +2.7%, which affects the predicted bankruptcy rate. The unemployment rate decreased by 0.4% to 3.0% in April 2023 compared to January 2023.

According to government statistics, the combined unemployment rate of the consumption and tourism-related sectors remained unchanged at 4.2% in the two periods. The unemployment rates of some sectors also declined, notably those of decoration, repair and maintenance for buildings, transportation sector and warehousing, and support activities for transportation sector*.

The decrease in the overall unemployment rate along with the year-to-date increase in GDP has resulted in a decrease in the estimated bankruptcy rate.

We expect that Hong Kong’s economy will continuously rebound in 2023, as estimated by the HKSAR government.

NOVA will continuously monitor the macro-economic environment and its impact on the number of bankruptcy cases accordingly, and leverage innovative technology to share valuable findings with the banking sector for making more accurate and timely business decisions.

* Hong Kong’s Information Services Department. (18 May, 2023). https://www.news.gov.hk/chi/2023/05/20230518/20230518_163158_594.html