GDP rose 39% in Q1, AMCM expects robust growth throughout 2023

Macau’s Gross Domestic Product (GDP) grew by 38.8% in the first quarter of the year as the local economy picked up sharply following the relaxation of borders.

In a report issued by the Monetary Authority of Macau (AMCM), coupled with a low-base effect of comparison, Macau’s economy is expected to register robust growth in the remainder of 2023.

In the first quarter of 2023, service exports recorded notable growth, as gross gaming revenue (GGR) surged by 94.1% amid booming inbound tourism. After subtracting service imports, net service exports recorded a robust increment of 85.9% and regained as the primary driver of the economy, contributing 44.1 percentage points to real GDP growth in the first quarter of 2023.

In the first quarter, the contraction of visible exports intensified to 40.6%, while that of merchandise imports moderated to 6.9%.

Meanwhile, in terms of visitor spending, after a contraction of 32.1% in 2022, visitor spending, as measured by exports of tourism services in GDP accounting, rebounded year-on-year by 71.4% in the first quarter of 2023.

“The strong performance was broad-based, with visitor spending on gaming and nongaming services advancing by 100.0% and 72.9%, respectively,” the report noted.

Retail sales also rose markedly on the back of vibrant visitor spending. Underpinned by the revitalisation of inbound tourism, retail sales increased 29.3% on an annual basis in the first quarter of 2023, as against a decline of 20.6% in the preceding quarter.

AMCM also noted that the challenges faced by the labour market were ameliorated. For the three-month period through May 2023, the unemployment rate declined year-on-year by 0.6 percentage points to 2.8% while the number of unemployed persons decreased from 12,800 to 10,500. The unemployment rate of local residents dropped by 0.8 percentage points to 3.6%.

“Macau’s external demand [will] be supported by the steady economic recovery in neighbouring regions, further unleashing strong pent-up demand for tourism services,” the bureau said in the report.

“Rigorous promotional campaigns launched by the government and non-gaming events organised by the gaming concessionaires [will] boost the growth momentum of external demand,” it added.  LV