Association projects stable economic outlook amid uneven recovery

The Macau Economic Association (MEA) has projected a stable outlook for the region’s economy despite persistent inconsistencies in key economic indicators.

According to government data, money supply (M2) reached a record MOP786 billion in January, marking a 6.4% year-on-year increase, which indicates ample liquidity. However, domestic demand for loans has weakened, leading to a decline in the overall loan-to-deposit ratio to 78.5%. Meanwhile, the non-performing loan ratio rose to 5.68%, reflecting challenges faced by the banking sector.

Investor and consumer confidence remains subdued due to economic uncertainties.

Although the Hang Seng Index has benefited from growth in mainland China’s technology sector, the stock prices of Macau’s six major Hong Kong-listed enterprises have remained under pressure.

Meanwhile, despite high visitor numbers, hotel occupancy, and robust tourism activity reaching, per capita spending has declined.

Last year’s annual retail sales fell 14.9% year-on-year.

In the first two months of 2024, under the influence of policies such as Zhuhai and Hengqin’s multiple-entry visas, average daily visitor arrivals reached 113,000, a 10.3% increase. However, the average daily gross gaming revenue only rose by 2.2% to MOP644 million, a more modest increase than expected.

For January and February, the association’s Prosperity Index stood at 6.6 and 6.5, respectively.

Projections indicate that from March to May, the index will likely remain between 6.4 and 6.6, maintaining an overall “stable” economic outlook.

However, industry experts warn that economic performance in the first quarter may fall short of expectations, requiring careful future assessments.

Preliminary estimates place gross gaming revenue for the first nine days of March at approximately MOP5.75 billion, with a daily average of MOP639 million.

Investment organizations forecast March’s total gross gaming revenue to range between MOP19 billion and MOP20 billion, making it unlikely for the first-quarter revenue to reach the SAR government’s target of MOP20 billion per month.

Macau also faces external challenges, including global economic uncertainties, U.S. tariff increases, a slowing mainland economy, and Renminbi depreciation.

Additionally, competition from neighboring regions’ gaming industries and changing consumption patterns among mainland visitors—particularly reduced spending on luxury goods—pose challenges for the local retail sector.