The latest figure was a 35 per cent increase over the 646 recorded last May. It was also the highest monthly figure since April 2022, when 930 bankruptcy applications were filed.

In the first five months of the year, 3,797 bankruptcies were logged, a 25 per cent increase over the 3,031 recorded in the same period in 2023.

But the number of bankruptcy orders dropped to 624 in May from 859 in April, a 38 per cent decrease, after jumping from 641 cases in March, according to the office.

The number of compulsory winding-up petitions for businesses reached 61 in May, down slightly from the 66 in the previous month, following 69 in March.

The number of petitions in May was also twice the 33 recorded in the same period last year.

The Financial Services and Treasury Bureau 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 the monthly figures for personal bankruptcy and company winding-up could fluctuate even within the same quarter.

“One cannot accurately assess the actual situation of the Hong Kong economy based solely 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 the Hong Kong economy is steadily improving and exhibiting a recovery momentum.”

The bureau pointed to the latest unemployment rate between March and May which stood at 3 per cent, as well as the gross domestic product (GDP) growing by 2.7 per cent, year-on-year, in the first quarter.

It was confident the retail and tourism sectors would recover, projecting the number of visitors would increase by 35 per cent to 46 million in 2024 compared with 2023, increasing revenue and stabilising the capital market, the bureau said.

“Hong Kong’s economic performance, including GDP growth, unemployment rate, exports, retail and tourism, all show that the economy is steadily improving,” it said.

Professor Terence Chong Tai-leung, the executive director of the Chinese University of Hong Kong’s Lau Chor Tak Institute of Global Economics and Finance, said the spike in bankruptcy applications could be related to banks recalling loans.

“The increase is more likely to do with personal investments,” he said. “I believe individual investors had purchased commercial properties, but they dropped over 40 to 50 per cent in value, so the bank might recall the loans and they might be forced to apply for bankruptcy.”

He added that the increase in numbers was unlikely to be related to the unemployment rate – which remained low – and people being unable to pay their mortgages, unlike during previous financial crises.

Simon Lee Siu-po, an honorary fellow at the Asia-Pacific Institute of Business at the Chinese University of Hong Kong, said the high interest rates in the past two years was the main reason that individuals went bankrupt.

He added that the economic recovery in sectors such as retail and sector were still slow.

The Hong Kong Monetary Authority last week cautioned that high interest rates might persist for some time following the United States Federal Reserve’s most recent rate decision.

The city’s de facto central bank said recent economic data showed mixed signs and inflation remained high, causing the current interest rate environment to “last for some time”.

The authority kept its base rate unchanged for a seventh time at 5.75 per cent last Thursday, following the Fed’s decision to keep its target rate in the range of 5.25 to 5.5 per cent, which was the highest level in 23 years.