Macau’s economy is set to return to growth in the second half of 2019, according to the latest forecasts from the Economist Intelligence Unit (EIU), which expects a contraction of 1% for the whole year.
The latest figures released by the Statistics and Census Bureau (DSEC) show that the economy of the territory contracted by 2.5% in the first half of 2019. However, DSEC drew attention to the fact that Macau’s economy contracted by 1.8% year-on-year in the second quarter, an improvement compared to the 3.2% decline in the first quarter of 2019.
For 2020, the EIU forecasts economic growth at a rate of 3.2%, although it does not expect large variations in key indicators. The major exception might be gross fixed capital formation, or investment, from a negative rate of 21% this year to improve to a negative rate of 11.2% in 2020.
The report refers to the forecast of economic growth for 2020, led by an increase in service exports, although it states that the gaming sector will continue to slow due to the absence of new casinos and reduced gambling spending by mainland tourists.
Government efforts to diversify the economy will remain unsuccessful, according to the EIU, which mentions that gambling operators are diversifying tourism offering by focusing on entertainment and leisure activities not directly related to gambling.
The EIU also notes that public investment projects, such as a new social housing area, a medical complex in the islands and the first phase of the Macau Peninsula light railway, will slightly boost gross fixed capital formation.
In contrast, public spending will continue to be the fastest-growing gross domestic product component in the near term, with the local government using this aggregate to bolster the economy. MDT/Macauhub