The Sars virus has killed 30 people in Hong Kong

The Sars illness is the key driver behind the rise, with the consumer and tourism-related industries amongst the worst hit.

Many workers have also taken pay cuts or are working part-time as the country tries to deal with the impact of the virus.

Economists are expecting the situation to worsen in the coming months.

"There will be tens of thousands of graduates leaving school and they will be looking for jobs in the next few months," said Stephen Ip, Secretary for Economic Development.

"With such a weak economy, it wouldn't be difficult for the headline figure to breach the 9% mark," said Daniel Chan, senior economist at DBS Bank Hong Kong.

Hong Kong had been battling against slow economic growth for many months before Sars struck in mid-March, as its global markets remained shaky as mainland China proved a bigger draw for foreign investors.

Earlier this month, the government announced plans for a HK$ 715m ($92m) package to create 32,000 jobs beginning in July.