Economy bouncing back from Covid, prosperity ahead

The local economy, as reflected by the Prosperity Index, has swiftly bounced back up to 3.6 points in January and is expected to reach 4 points in February, the Macau Economic Association (MEA) announced.

Looking ahead, the association forecasts the index to rise further and expects it will reach 5 points in May, which falls within the Stability scope.

Major factors supporting the bounce, the MEA said, include border normalization, resumption of normal travel and elevating M2 currency supply.

The last factor rose to over MOP7, 240 in January, 4.6% year-over-year increase and a historic high. As for the first two factors, nearly three times the number of tourists was seen in January compared with the end of last year. Crowds were also seen at several popular tourist attractions and were so large that crowd control measures were required a few times.

Hotel occupancy rate has risen to 70% in January and average daily gross gambling revenue in January and February to around MOP370 million, which is a new high since the start of the Covid-19 pandemic.

In addition, both Beijing and the IMF have high expectations for China’s economic performance this year, with the former forecasting 5% increase and the latter 5.2%. Moreover, the association pointed out that several mainland economic indicators, such as the Procurement Manager Index and the Consumer Confidence Index, have indicated rising trajectories. This will help Macau’s economic recovery, the association explained, adding that the local tourism board’s efforts will definitely attract more tourists.

However, the association also warned the city that geopolitical unsettlement, regional conflicts and financial concerns will be complications affecting recovery. The multiple interest hikes in the US have not only have lowered investor confidence, but also put the Silicon Bank and the Signature Bank into collapse, which, in the opinion of the association, will affect global recovery.