Macau is expected to end 2019 with economic growth of 3.2 percent, and for growth to increase by 60 basis points to 3.8 percent by 2020, according to the latest Economist Intelligence Unit (EIU) forecasts, reviewed by Macauhub.
One of the reasons for the slowdown in economic growth compared to 2017 and 2018, when gross domestic product (GDP) grew by 9.7 percent and 4.7 percent respectively, is due to delays in the execution of various public works. The EIU report added that, additionally, no large new projects are planned by gaming operators, with the consequent impact on gross fixed capital formation.
Investment, which fell by 4.7 percent in 2017, worsened the following year to 12.6 percent, and is expected to contract by 4.1 percent this year, before rising again to a rate of 6.7 percent in 2020, according to the same document.
The increase in gross fixed capital formation in 2020, according to the EIU document, is based on the fact that the government is expected to announce its official position on the renewal of gaming concession contracts, which will give casino managers scope to expand their activities.
However, this expansion should not focus directly on gaming and gambling activities, which is limited to the maximum number of tables authorized by the government, but to tourism activities not directly related to gaming.
The EIU report added that major public works projects, such as social housing in New Urban Area A, the islands medical complex and the first phase of the surface light railway, should have a limited impact on gross fixed capital formation in the period under review. DB