Economy | Third quarter growth at 4pct owing to gaming rebound

The economy of Macau expanded by 4 percent year-on-year in real terms during the third quarter of 2016, according to data released yesterday by the Statistics and Census Service (DSEC), representing the first positive quarterly growth in the past two years.

The news comes off the back of three consecutive months of year-on-year growth in gross gaming revenues, two of which fall within the quarter.

DSEC have attributed the rise to a rebound in both exports of services and investment. “External demand showed improvement, leading to a pickup in exports of gaming services and exports of other tourism services, rising by 0.2 percent and 6.5 percent respectively year-on-
year,” noted DSEC in yesterday’s statement.

The institution’s conclusions are supported by data published earlier this week that showed that visitor spending in the territory had rebounded, representing the first signs of growth in seven consecutive quarters.

Also in the third quarter of 2016, domestic demand recovered and private consumption expenditure and investment grew by 0.3 percent and 2.3 percent respectively. The implicit deflator of GDP, which measures the overall change in prices, rose marginally according to DSEC, by 0.2 percent year-on-year.

Private consumption expenditure rose slightly by 0.3 percent year-on-year in the third quarter, supported by a “favorable employment situation” and reduced inflationary pressures, thus ending its downtrend in the two previous quarters.

Nevertheless, expenditure on durable goods remained weak, indicating that households remain cautious about spending on non-essential items. Household final consumption expenditure in the domestic market and abroad grew by 0.5 percent and 4.5 percent respectively.

Government final consumption expenditure diminished, falling by 1.3 percent year-
on-year, lower than the 6.1 percent growth in the second quarter of this year. Compensation of employees increased by 2.2 percent, while net purchases of goods and services decreased by 4.9 percent.

At the same time, investment gained momentum during the third quarter, underpinned by an increase in private investment. Gross fixed capital formation, the gauge of investment, grew by 2.3 percent year-on-year, rebounding from a sharp decline of 20 percent in the previous quarter. Meanwhile, government investment rose by 1.8 percent, of which equipment investment grew by 17.5 percent but public construction edged down by 0.1 percent.

Decline in merchandise trade tapered off. Overall demand stabilized, with private consumption, investment and visitor spending showing modest growth. Both imports and exports of goods decreased at a slower rate, by 7.3 percent and 15.6 percent respectively year-on-year, far lower than the 17 percent and 24.7 percent declines in the second quarter.

Also aggregated in the statement was the economic growth of the MSAR for the first three quarters of 2016, which in fact contracted by 5.4 percent in real terms compared with the same period in the previous year.

Economic growth for 2014 and 2015 was revised downwards from 0.9 percent and -20.3 percent to -1.2 percent and -21.5 percent respectively. DB