Economy shrinks by 49% during first quarter of 2020

Macau’s economy posted a deep contraction in the first quarter as lockdown measures introduced to contain the virus outbreak hit revenue from gambling, hotels and tourism.
Gross domestic product in Macau plummeted 48.7% in the first three months of 2020, according to the city’s statistics department. That is the fifth straight quarterly decline in the city’s economic output.
In a statement over the weekend, the Statistics and Census Service (DSEC) attributed the major contraction to a “substantial decline in total demand” for Macau’s exports of services.
Exports of services dropped by 60% year-on-year, according to DSEC, with exports of gaming services and other tourism services falling even faster, by 61.5% and 63.9% respectively.
The local economy depends heavily on the city’s casinos, whose revenue was badly damaged by a 15-day lockdown in February and visitation restrictions on the mainland, which have made travel to Macau impractical for most people.
Visitor arrivals fell by nearly 70% in year-on-year terms in the first quarter, with January accounting for the majority of Macau’s 3.22 million tourists, before the effect of the Covid-19 pandemic was felt outside of mainland China.
Travel restrictions in or out of Macau will be lifted by early June, while the individual traveler visa scheme will restart soon after, according to analyst Vitaly Umansky, as cited by Bloomberg.
Plans for a ‘travel bubble’ involving at least Guangdong Province, Hong Kong and Macau are believed to be under discussion by the relevant authorities, though no information has yet been disclosed on when exactly travel restrictions would ease.
“Once global lockdowns are lifted, the worst may be over for the tourism-related sectors in Hong Kong as well as Macau,” Overseas-Chinese Banking Corp economists including Tommy Xie wrote in a note. “That said, neither of the two cities will be able to see a strong recovery in its tourism activities amid concerns about second wave of infections.”
MDT/Bloomberg