Economy shrinks 3.2%, ending 10 consecutive quarters of growth

The economy of Macau contracted by 3.2% year- on-year in real terms during the first quarter of 2019, according to the latest data from the Statistics and Census Service (DSEC), ending an uptrend that lasted for 10 consecutive quarters.

Total demand weakened in the first quarter, leading to increased downward pressure on the economy.

Weak growth momentum led to a mediocre performance in the services trade. Despite a marked increase in visitor arrivals, exports of services reduced by 0.3% year-on-year as visitor spending slowed down. Exports of gaming services and other tourism services reversed from an uptrend, dropping by 0.6% and 0.3% respectively as compared to the respective growth of 6.7% and 1.4% in the previous quarter.

Domestic demand remained sluggish, down by 9.4% year- on-year owing to a significant decline in investment in fixed assets. Private consumption expenditure and government final consumption expenditure rose by 2.1% and 4.1% respectively, offsetting part of the decrease which was seen during the economic downturn.

Imports of goods grew by 2% while imports of services declined by almost 21%. The implicit deflator of gross domestic product, which measures the overall changes in prices, increased by 3.2% year-on-year in the first quarter of 2019.

Meanwhile, government final consumption expenditure recorded sustained growth, up by 4.1% year-on-year, higher than the 3.4% rise in the previous quarter. Compensation of employees and net purchases of goods and services increased by 2.4% and 7.0% respectively. DB