Association expects up to 16% economic growth next year

The city’s gross domestic product (GDP) growth next year will fall between 5% and 16%, estimated Joey Lao Chi Ngai, director-general of the Macau Economic Association, speaking on the sidelines of a forum.

Lao explained that the estimate was made based on the results generated by a data model which made calculations in relation to the city’s GDP performance and gross gaming revenue (GGR).

Based on the calculations, Lao expects the economy of the city to return to between 50 and 60% of pre-Covid levels, with the GGR likely amounting to between MOP95 billion and MOP140 billion. He stressed that the key factors affecting next year’s economic recovery will still be the developments in the current pandemic and the environments of external economies.

For the time being, he is “cautiously optimistic” about the recovery’s trajectory.

Lao also commented on the recent closures of VIP casinos and junket operators. Due to this development, he sees the possibility of negative year-on-year growth in economic data for the fourth quarter.

Despite the estimate’s range, he said the annual growth could be in double digits, considering the city’s “satisfactory” economic performance in the second and third quarters.

Making recommendations to the government, Lao said that the city’s tourism resources should be expanded and that the city should aim for wider sources of tourists. The government should also pick up the pace in constructing the city as a world center for tourism and leisure.

The academic says the city should also follow the national policy of “double cycle” and expand the scale at which it attracts investments and entrepreneurs, as well as welcoming talented workers who can take the lead in different trades.

In October, the International Monetary Fund (IMF) heavily downgraded its forecast for Macau’s 2021 GDP growth to 20.4%, a drop of 40 percentage points from its April prediction of a 61% rebound.

The change in the fund’s forecast follows the city’s wave of Covid-19 infections in October, which led to the closure of government and entertainment venues, a third round of mass testing and a halt on travel due to the Zhuhai authorities’ requirement that individuals arriving from Macau undergo 14 days of quarantine.

Although casinos remained open, Macau’s GGR took a hit in October from these impacts. The GGR for the month was just MOP4.37 billion, down 25.8% compared with September.  AL/LV