Economic group expects Prosperity Index to reach trough this month
As the city faces economic challenges amid the present Covid-19 outbreak, its Prosperity Index will likely see its lowest point in July, the Macau Economic Association expects.
As for the June and July indices, the association estimates these to be 1.8 and 1.7 points respectively, signaling fierce challenges in the months in terms of economic performance and recovery progress.
Nonetheless, the association expects July will see the bottom of the downward trend and the index for August to pick up energy for recovery, catching 1.8 points in August and 1.9 in September.
The association announced the May index as 1.9 points.
Factors that cause the falling trend or projection include global inflation, monetary policy restrictions and fluctuating Covid-19 conditions.
These factors have exerted pressure on tourist arrivals, gross gaming revenue (GGR) and stock prices of casino operators.
M2 money supply has fallen year-over-year in the past seven months, reaching only MOP674.5 billion.
The outbreak of SARS-CoV-2 that started mid-June is impacting the city remarkably, the association added. This is the first time the city has entered lockdown since the Covid-19 pandemic began. Even in the early stages of the outbreak in Macau, the government did not order the entire business sector to suspend operations.
In contrast, many countries in the world have lifted entry bans and coronavirus testing requirements.
The association suggested the government make further improvements to its financial subsidies so as to cover as many residents and business operators as possible, given the “deadliness” of this outbreak to the economy. It cited the high transmissibility of the BA.5 strain of the Omicron variant to support the comment.
It added that the subsidy schemes should be implemented as soon as possible to improve resilience and performance of the city’s economy, which will eventually hasten economic recovery.
Over the weekend, Secretary for Economy and Finance Lei Wai Nong announced an updated version of the subsidy scheme first announced June 19. The new version will have larger coverage, the senior official said.
He also announced an extra round of subsidy that will also include the non-working population, such as the elderly and children.
Lei expects the subsidy will be available from early August.
The association expressed its support for the “dynamic Covid zero” target, adding that it would allow social interactions, economic activities and mainland border-crossings to resume as early as possible. This, in its opinion, will help with the city’s “healthy, safe, stable and persistent” development. It also pointed out that the earlier the outbreak is controlled, the smaller its impact on society.
