GDP projected to grow by 7.7% in 2025 amid global uncertainties

The local economy is expected to grow by 7.7% in 2025, despite facing challenges from a slowdown in China’s economic growth and uncertainties in global economic policies, as forecasted by the Centre for Macau Studies and the Department of Economics at the University of Macau (UM).

Macau’s economy has been gradually returning to normal since the pandemic. Visitor arrivals showed significant growth in early 2024, with 8.88 million visitors in the first quarter, a 79.4% year-on-year increase. However, growth began to taper in subsequent quarters, with third-quarter visitor arrivals totaling 9.2 million, only an 11.1% year-on-year rise.

Mainland China accounted for the majority of visitors (6.68 million), while arrivals from Hong Kong declined by 6%.

Services exports, a critical component of the city’s economy, reflected this trend. Real exports of services in the third quarter of 2024 amounted to MOP 72 billion, up just 1.3% year-on-year. Gaming expenditures by non-residents saw an 11.2% increase, but non-gaming expenditures fell sharply by 14.5%, indicating a need for diversification in the city’s revenue streams.

Meanwhile, domestic demand demonstrated resilience, with private consumption and investment showing steady growth. Real private consumption expenditure reached MOP 28.9 billion in Q3 2024, up 1.9% year-on-year. Consumption on food, beverages, and tobacco grew by 5.2%, while spending on consumer goods decreased by 2.7%. Investment activity was robust, with gross fixed capital formation rising by 16%.

Inflation remained under control, with the consumer price index increasing by 0.8% from January to November 2024. Food and non-alcoholic beverages, the largest component, had a moderate inflation rate of 1.2%, while housing and fuel saw an increase of just 0.5%.

Meanwhile, labor market remained tight, with the overall unemployment rate steady at 1.7% in Q3 2024 and the unemployment rate among residents at 2.3%. Median monthly employment earnings reached MOP 18,000 for the overall workforce and MOP 20,500 for residents, both exceeding pre-pandemic levels recorded in 2019.

The global economy, while expected to grow by 3.2% in 2025, faces uncertainties stemming from geopolitical tensions and varying economic policies across nations. China’s economic growth has slowed due to structural changes and weak expectations, while potential trade frictions with the U.S. add to the uncertainty. In Hong Kong, a significant services export market for Macau, economic growth was a modest 1.8% in Q3 2024.