Macau’s economy contracted by 63.8% year-on-year in real terms in the third quarter of 2020, a slightly smaller contraction compared to the previous quarter (-68.0%), according to new data released by the Statistics and Census Service.
With a rebound in visitor arrivals following the easing of travel restrictions for mainland residents to visit the SAR, exports of services of Macau fell at a slower rate of 87.5% in the third quarter, of which exports of gaming services and other tourism services went down by 93.6% and 87.9% respectively.
Meanwhile, exports of goods soared by 252.2% year-on-year. Domestic demand saw a smaller decrease of 6.1% year-on-year, on account of a slower rate of decline in private consumption expenditure.
In the recent Policy Address, Chief Executive Ho Iat Seng forecasted that the economic and social situation is not likely to show significant improvement in the next year.
The government forecast that Macau’s gross domestic product (GDP) will fall by 60.9% this year
Ho had warned the population not to expect a fast economic recovery, especially during 2021, and to take into account that the economic recession caused by the Covid-19 pandemic is expected to continue for a relatively long period and will likely result in additional hassles to the population.
Commenting on the GDP decline, economist Albano Martin told the Times, “I still believe, however, that the year-to-year GDP real decrease will be between 61% to 64%.”
“In the future, I think that the first quarter of 2021 may see a decrease because of the ‘strong’ [GDP in] January and […] February of 2020. But in the next quarters, the growth will almost duplicate,” said Martins. “We may see a two-digit growth in 2021.”
Meanwhile, as the SAR government maintained its expenditure on pandemic prevention and continued providing economic relief measures, government final consumption expenditure recorded a larger increase of 18.6% as against the 16.3% growth in the previous quarter. Net purchases of goods and services rose by 33.9% while compensation of employees went up by 2.7%.