Association expects economy to remain gloomy for the next three months

The Prosperity Index in June and July was 1.7 and 1.5 respectively, which reflected that the city’s largest Covid-19 outbreak has made a significant impact to the local economy, according to a study conducted by the Macau Economic Association.

As a result of the 12 days’ suspension of casinos and the outbreak that led to the city’s partial lockdown that happened last month, gaming revenue in July dropped by 95.3% year-to-year to only MOP398 million; a record low in decades.

In the middle of June, the rising number of visitors to Macau, hotel guests, occupancy rates and other economic data also dropped rapidly. 

The job market is sluggish, with the local unemployment rate rising to 4.8% in June, the highest level in nearly a decade. 

“The recovery of the economy needs tourists visiting Macau, so far, we can only hope the pandemic will not rebound again,” said president of Macau Economic Association Joey Lao.

As the outlook is not clear yet due to pandemic prevention measures, the association believes that Macau’s economic index will remain at a “depressed” level for the next three months.

The association considers that reasons affecting the recovery and development of the local economy are a combination of domestic and international circumstances, the international pandemic rebound, higher global inflation and the tightening of monetary policy.

The non-performing loan ratios of residents and non-local residents have doubled from 0.45% and 0.23% in January 2020 to 0.82% and 0.78% in June this year.
The scale of local non-performing loans is likely to expand further in the coming months. 

After comprehensive research of various factors, the association predicts the Prosperity Index of Macau will remain around 1.8 to 1.9 over the next three months.

“Economic recovery of Macau mainly depends on the pandemic and its pandemic prevention measures,” the association pointed out.

As for the two rounds of the MOP10 billion financial assistance measures, Lao considers that the relevant measures can only stimulate the basic domestic economy in Macau. 

“Resumption of customs clearance is necessary for the recovery of Macau’s economy,” Lao added. Staff reporter