Confidence in economy strengthened by 15th Five-Year Plan

The Macau Economic Association’s (ACEM) latest report on the region’s economic sentiment index highlights that the 15th Five-Year Plan has bolstered confidence, projecting a stable local economy for the second quarter.

The ACEM first reported that Macau’s tourism and gaming sectors are showing promising signs of recovery, despite some uneven performance across the industry.

Official data indicates a continuous recovery in Macau’s gaming industry, with Gross Gaming Revenue (GGR) reaching MOP22.63 billion in January and MOP20.63 billion in February, reflecting a combined year-on-year increase of 13.9%.

Daily GGR averaged MOP730 million in January and MOP737 million in February, marking the second and third highest daily averages since the pandemic began.

In light of these figures, the association acknowledged that Macau’s tourism, leisure, and entertainment sectors have demonstrated a robust rebound in the first two months of the year and projected that GGR for March would fall between MOP21.0 billion and MOP21.5 billion.

Tourism-related metrics are also on the upswing, with inbound visitor numbers and hotel and apartment occupancy rates entering an “overheated” range. This trend signifies strong demand for services, as highlighted by the association.

The labor market maintains stability, with favorable total employment levels and a low unemployment rate. The association emphasized that this trend reflects the ongoing expansion of demand in the service sector, primarily driven by the revival of tourism in the region.

The report synthesizes various indicators for its assessment of Macau’s economic landscape.

Notably, the overall non-performing loan ratio has demonstrated a positive trend, declining for two consecutive months, while the broad money supply (M2) reached a record high of MOP859.15 billion year over year. Additionally, the value of goods imports has entered the “overheated” range for the first time in nearly two years.

However, the report highlights that indicators of domestic demand and market confidence remain relatively weak. China’s consumer confidence index is at a low level, the loan-to-deposit ratio for local residents continues to decline, and both the residential property price index and the stock prices of the six major integrated resort companies are hovering near recent lows.

While these indicators of recovery are encouraging, the report underscores the importance of continued monitoring of performance across various sectors in the months ahead.

The association anticipates that Macau’s economic conditions will remain stable in the second quarter; however, it cautioned that the impact of rising oil prices, driven by recent developments in the Middle East, may have lingering effects.

“Increasing energy prices could raise the cost of living for residents and compress corporate profits, potentially dampening consumer sentiment,” noted the association. It emphasized the importance of closely monitoring the challenges posed by external factors, alongside addressing imbalances and shortcomings in internal development.