Latest government figures showed Hong Kong's population fell by 1.6 percent in the past year, with a net outflow of people accounting for nearly 80 percent of the decrease.

According to figures by the Census and Statistics Department, the city's population dropped by 121,500, from 7,413,100 in mid-2021 to 7,291,600 in mid-2022.

It's the second year in a row the population has dropped.

Data showed 18,300 one-way permit holders came to the SAR while 113,200 Hong Kong residents left, for a net outflow of about 95,000.

The year before, 89,200 people left Hong Kong.

"Net movement includes the movement of Hong Kong residents into and out of Hong Kong for various purposes such as work, study and migration, but the breakdown of figures is not available. Hong Kong residents travelling abroad are not required to declare to the government their purpose of travel. Therefore, the government does not have direct statistics on emigration of Hong Kong residents," a government spokesperson said.

The spokesperson also said Hong Kong residents who had left the city before the pandemic may have chosen to live elsewhere temporarily or were unable to return to the SAR.

The government added that stringent coronavirus restrictions have interrupted population inflow. But authorities believe more people would come to Hong Kong as quarantine and social distancing measures are relaxed.

A natural decrease – with more deaths than births being reported – was another reason behind the drop in population.

During the period, 61,600 people died while 35,100 were born. That's a natural decrease of 26,500, accounting for 21.8 percent of the population drop.

Population expert Paul Yip, a professor from the University of Hong Kong’s Department of Social Work and Social Administration, said the outflow of people will have an impact on the city.

"The magnitude of the outflow has been increasing in the past two years, and it is likely to continue for another couple of years. This net outflow would have some significant impacts to the workforce in Hong Kong, and also subsequently that might have an impact on the economic development in Hong Kong as well," Yip said.

"What we've observed is that this group of people is mainly young graduates or young couples, which also play a very critical part in the manpower of Hong Kong."

Yip urged the government to come up with measures to address the outflow of talent and the low birth rate.