Economic association forecasts uneven recovery over next three months

The Macau Economic Association’s (MEA) latest Economic Sentiment Index indicates that, despite a strong influx of tourists in June, consumer confidence among mainland Chinese visitors remains low, raising concerns about external demand and the uneven economic recovery anticipated from this month through October.

The recently released MEA report highlights an overall positive trend in Macau’s tourism and gaming sectors, noting strong performance in June with daily visitor numbers averaging 96,400 and hotel occupancy rates at 88.4%.

Additionally, stable gross gaming revenue (GGR) has contributed to a slight recovery in the financial performance of the city’s six integrated resort operators, improving their status from “sluggish” to “poor,” despite ongoing challenges.

However, the report highlights two main issues that suggest challenges for Macau’s economy, particularly in attracting external demand and maintaining a healthy real estate market.

First, consumer confidence among mainland Chinese tourists remained low in June, indicating weak demand from this group.

Second, the residential property price index decreased to 196.1 points, signifying insufficient activity in the property market.

According to the report, Macau’s business sentiment index for June and July remained stable, registering at 5.8 and 6.0, respectively.

Investment banks have raised their forecasts for the region’s GGR for this year and next, driven by the anticipation of potential interest rate cuts by the U.S. Federal Reserve in September.

Inbound tourism is also expected to remain robust, with projections of 300,000 to 330,000 visitors from August to October.

However, the report highlights some concerning trends. Per capita non-gaming consumption has decreased by 12.3% year-on-year to MOP1,950, and the overall residential property price index has dropped below the critical 200-point mark to 196.1 in the second quarter.

Additionally, the local residents’ loan-to-deposit ratio remains low, indicating limited borrowing activity, which may hinder economic growth.

The report noted that these factors contribute to an expectation that the Economic Sentiment Index will stabilize between 5.9 and 6.0 points from this month through October, suggesting an uneven recovery for the economy.

The association recommends optimizing the business environment and enhancing support for the tourism and related industries to foster economic growth. It also emphasizes the need to adapt to changing consumption patterns by improving product structures and the value of tourism experiences to effectively meet future challenges.