[Photo; Renato Marques]
The Macau Economic Association (AECM) has released its latest report on Macau’s economic prospects for the year.
In the release, the association said this year has started with a strong economic performance, which should remain stable throughout the year.
According to the AECM release, January got off to a strong start, with gross gaming revenue surging 24% year-on-year to MOP22.63 billion. The daily average gross revenue reached MOP730 million, marking the second-highest monthly average since the pandemic began and boosting overall macroeconomic sentiment.
The association also said that “although the rebound in gross gaming revenue exceeded market expectations and the fundamental improvement supported the valuation of large integrated tourism and leisure enterprises, the stock performance of the six major leisure enterprises diverged, and their prices generally remained near five-year lows.”
The group noted that hotel occupancy rates and inbound visitor numbers have entered an “overheated” range, but mainland consumer confidence remains low, with per capita non-gaming spending by visitors continuing to decline, and the recovery in asset prices remaining relatively slow.
AECM said this reflects “insufficient and unbalanced overall economic development, with a full recovery yet to materialize.”
“Based on multiple indicators, the economic sentiment indices for December last year and January this year were 6.4 and 6.2 points, respectively. This indicates that despite a favorable start, challenges arising from external environmental changes and internal development imbalances warrant continued vigilance.”
Bank performance surges, ending four-year decline
Also contributing to the forecast of a stable year was the end of a four-year decline in the banking sector’s performance.
“By year-end, the overall non-performing loan ratio in Macau had significantly declined to below 5% under effective bank management, reaching a level not seen in over a year and a half. This alleviated pressure on asset quality to some extent. Banking sector profits also bottomed out and rebounded, with annual operating results reaching MOP7.337 billion, a substantial 92.72% year-on-year increase, reversing four consecutive years of decline,” AECM noted, despite noting that the loan-to-deposit ratio among residents continued its downward trend.
According to the association, the loan-to-deposit ratio fell month-on-month to 46.4% in December last year, reflecting a more cautious and conservative stance in the banking sector.
Stable development over the next three months
Looking ahead to the next three months, benefiting from the Lunar New Year holiday, the AECM noted that inbound passenger volume is expected to remain substantial, providing robust support for the local economy and driving sustained, stable, and positive economic momentum.
The association also noted that 90 local establishments were featured in the recently released Forbes Travel Guide rankings, highlighting the region’s brand strength and service quality in the high-end tourism market.
It believes these accolades further cement Macau’s position as a world-class tourism and leisure hub and are likely to attract more high-net-worth clientele, mitigating the impact of seasonal fluctuations to some extent.
Based on comprehensive analysis and projections, the economic climate index for Macau is expected to remain within the range of 6.1 to 6.3 points from February to April this year, with overall economic conditions continuing to develop in a “stable” manner.
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