Despite the city’s smoothly recovering economy, underlying factors may fluctuate, Macau Economic Association (MEA) warned yesterday in a statement.
Amid its announcement on the latest Prosperity Index, the group warned that at least three indicators for the index remain at dissatisfactory levels. The three factors are the stock prices of the six casino operators, the Chinese Consumer Confidence Index and the total employed population of China.
On the other hand, high interest rates are also a critical factor of which the market should be mindful. Inter-bank Offered Rates in both Hong Kong and Macau have remained at an escalated level, raising costs of capitalization for both businesses and individuals. The situation discourages investment and consumption.
Meanwhile, the increase in size of non-performing loans and constantly tightening net interest margin have also led to decrease in banks’ revenues from operations and the probability of expanding provision.
Proving its observations with figures, the group reiterated that the city’s overall rate of non-performing loans had risen to 2.18% for July. The rate concerning non-residents rose to 2.79%, which is a new high.
September is traditionally a low season for travel as summer holiday ends. The suspension of casinos early this month in response to Super Typhoon Saola has also posed risks to gross gaming revenue for the month.
Despite this fact, the group remains optimistic for local tourism in October as it is the month of Chinese National Day on the one hand, and on the other, 51% of mainland residents who travelled in the first half 2023 have been to Macau.
The group expects the city’s economy to be vibrant in the coming months with a series of festive or celebratory events as the year edges towards its conclusion.
Therefore, it forecasts the city’s Prosperity Index for August to November to be between 6.0 to 6.2 points.
Looking back, the group revealed that the index for July is 5.9 points. The score was supported by satisfactory, if not overheated, performances in hotel occupancy rate, total employed population, as well as unemployment rate. Having risen for eight consecutive months, local currency supply measured in M2 has reflected improved intentions for investments, the group added.