Economic performance for March, April estimated to be weak
Despite a rising estimated trajectory, the Prosperity Index for March to June will likely fly low, the Macau Economic Association (MEA) has forecast in a statement.
The projected values for the Index for these months are estimated to range between 2.5 and 2.7 points on a scale of 0 to 7 points.
Citing the International Monetary Fund’s (IMF) optimistic forecast of Macau’s economic recovery, which highlighted an estimated growth of 15.5% this year, MEA believes Macau will retain its attractiveness to tourists.
It added that Chief Executive Ho Iat Seng’s recent lecture at the parliament on the 12-year economic cycle and the need for public faith in the city will support its trust in the city’s recovery.
Meanwhile, the recently foreshadowed consumption stimulus and utility subsidies will help support local small and medium enterprises, the MEA suggests.
The tightness of restrictions in different cities still fluctuates. For example, Hong Kong has recently announced the partial loosening of its disease control measures, such as permitting the reopening of cinemas and relaxing social distancing measures in certain settings. However, some mainland cities have intensified their measures in their attempts to contain the spread of the virus.
With this said, the desire of tourists to travel to Macau may not be strong, the MEA noted, adding that some business operations in tourism districts have ceased. The city is also undergoing a structural economic transformation.
Given the analyses and forecasts, the MEA expects the local unemployment rate to further increase, suggesting that the public brace for bumps.
Reviewing the month of February, the index was at 2.6 points.
The drop was mainly caused by the downsizing of the M2 money supply, which has exhibited a year-on-year contraction for four months in a row, since November last year.
Furthermore, the plunge in share prices of the six casino operators – the powerhouse of the city’s economy – which reached as high as 35%, together with the fall in visitor arrivals and hotel occupancy rates, has put downward pressure on the Index level.
The employment rate also saw pressure, as employment figures fell from 401,000 during the early phase of the current Covid-19 pandemic to 373,000 in February, signaling a rising unemployment rate for four consecutive months.
Worse, the Consumer Confidence Index in mainland China became weak, recording a 5.1% year-on-year decrease. The outbreaks in several mainland cities, such as Shanghai, Guangzhou and Shenzhen, have applied heavy pressure to the mainland index.
