Fitch forecasts 65% GDP rebound in 2023

Fitch Ratings anticipates growth of up to 65% in Macau’s economy this year, driven by sustained recovery in the gaming and tourism sector.

In its report entitled “Asia-Pacific Sovereigns – Peer Review,” the new forecast by Fitch Ratings rose 19 percentage points compared to initial predictions made in December when borders were still closed.

In December, the group forecast a 46% rebound in 2023 from a 17% decline. The initial projection was based on expectations that heightened policy uncertainty and lackluster recovery in mainland China, coupled with the global monetary tightening cycle and recessions in the US and Eurozone, would affect growth in Hong Kong, Macau and Taiwan.

In its recent report, the firm said that the strong growth comes amid China’s faltering economy – which adds to worries over surging youth unemployment and a weak property sector. The situation is thought to increase the likelihood of the government doubling down on support for the faltering post Covid-19 recovery.

“We project economic growth will remain robust at 17% in 2024, with full-year gaming revenue recovering further to almost 80% of its 2019 level,” said Fitch Ratings.

The city’s gaming revenues have so far already reached MOP128.95 billion, approaching the government’s expected MOP130 billion this year.

Tourist arrivals have also sustained momentum and demonstrated consistent recovery, despite slightly lower arrivals in September compared to August’s post-pandemic record high.

The recent eight-day National Day holiday broke post-pandemic records, marking the first Golden Week where Chinese travelers were free to travel without border restrictions in three years.

Fitch Ratings also anticipates Macau’s current-account surplus to increase to 25.6% of GDP in 2023.

Despite the budget remaining in the red for next year, Ho Iat Seng said in August that the government would maintain population livelihood allowances for 2024.

Previously, the ratings institution anticipated it could take until at least end-2025 for GDP to return to 2019 levels, “along with a moderate non-gaming diversification.”

The statement was previously echoed by the local government, which stated that with the approval of the new gaming law and new concessions to be attributed before the year’s end, the gaming concessionaires will “promote the development of non-gaming elements next year according to the commitment made on the public tender.”