Chan said yesterday that with the local Covid-19 situation gradually coming under control, the easing of social-distancing measures in phases and a new round of electronic consumption vouchers were all expected to help the economy improve steadily this quarter.

"Despite this, many businesses and wage earners are still suffering from the economic pressure and impact of the previous outbreaks," he said.

"And even though the overall economy has initially calmed down, the actual pressure they face in their lives still needs a stable environment and enough time to gradually ease," Chan added.

The latest jobless figure rose to 5 percent in the first quarter, compared with 4.5 percent from December to February.

The number of unemployed rose by more than 27,000, bringing the total to 188,000.

"Although the market is now starting to improve, the jobless rate for February to April, to be released in the middle of next month, will still reflect the difficult situation with the fifth wave, so it still needs some time for the unemployment rate to go down," Chan said.

The latest easing of curbs saw the resumption of dinnertime dine-in services and the reopening of some businesses hit by more than three months of closure.

Despite the government having spent hundreds of billions in fighting the epidemic in the past few years, Chan said it is going to announce its results for the 2021-22 financial year in the coming days,with the administration recording a fiscal surplus of more than HK$29 billion, up from an initial estimate of HK$18.9 billion after revenue from profits tax came in higher than expected.

"Hong Kong's local inflation rate is relatively moderate, but we must always be alert to the stormy external environment, especially the geopolitical situation and interest rate trend," Chan said.

He also said Hong Kong has to monitor the situation with local interest rates and the trend with the exchange rates in Hong Kong, whether there will be capital outflow, and the impact of interest rate increases on home buyers and the quality of mortgage loans.