Gov’t expects 1.9% budget reduction compared to 2025

The government budget for 2026 presents a 1.9% reduction compared to 2025, the Secretary for Economy and Finance, Anton Tai, admitted yesterday at the Legislative Assembly (AL), where the budget law was discussed and passed in plenary in its first reading.

Tai admitted that part of this saving comes from reduced projected expenses related to the attribution of the wealth-participation scheme, also known as the annual cash handout.

The matter was also noted by lawmaker Ella Lei, who questioned the Secretary on the savings of around MOP840 million (from a total projected spending of MOP6.64 billion) in this plan, which directly benefits the population. She also called on the government to explain where it expects to redirect these “additional” funds.

In response, Tai explained that the MOP6.64 billion cash handout was projected based on the number of eligible residents.

“The reduction of spending on this plan is based on the number of eligible people, but we are not reducing the total government investment in benefits to the population, which will increase by 3.8%,” Tai said, adding that there is a three-year period to appeal exclusion from cash handout eligibility, which means some residents might still be included later.

Tai also told lawmaker Lei that the difference “saved” due to the reduction of eligible residents will revert in favor of population well-being and will be used for various support programs,” the Secretary affirmed.

He remarked that total government expenditure on benefits to the population will reach MOP26.75 billion in 2026.

On the topic, the Secretary mentioned several benefits included in the policy address and reflected in the budget, such as “measures to stimulate the real estate market,” aimed at those who want to buy a house to live in.

Lei and several other lawmakers, after her, also questioned Tai about the forecast for gross gaming revenue (GGR), which the government lists as its primary source of income.

Lei remarked that with less than two months remaining in the year, it should be clear how this industry is performing, as results show an almost complete recovery, and that the forecast of MOP236 billion, used as a reference by the government, seems disconnected from the current reality.

Similar arguments, but with stronger words, were used by lawmaker Kevin Ho, who said that while it is acceptable for the government to have a prudent approach, it is less satisfactory and undesirable that it maintains a pessimistic view of the local economy.

“The budget should be prudent but optimistic, not prudent and pessimistic,” Ho said, adding, “Forecasting a reduction in GGR compared to current levels is a pessimistic approach to economic performance and can carry consequences for investor trust.”

In response, Tai explained that the GGR forecast amendment for 2025 was made at a time when the industry was underperforming in the first months of the year, adding, “So, for next year, we had a careful approach as GGR results impact our microeconomy. For next year, our forecast is based on evaluation of the results of the last two years,” Tai affirmed.

According to the government budget proposal, revenue from the “special gaming tax” is estimated at MOP82.8 billion, followed by supplementary income tax of MOP7.386 billion and professional tax (MOP3.248 billion). In total, the government expects receipts of MOP118.8 billion.

Despite a 1.9% reduction in the total budget, the government forecasts a 0.1% increase in expenses, totaling MOP113.5 billion, creating a positive balance of MOP5.31 billion.

In 2026, the Government Investment and Development Expenditure Plan (PIDDA) is expected to reach MOP18.1 billion.

The conservative forecast for GGR also runs counter to the budget document’s text, which says, “it is expected that Macau’s tourism industry will continue its growth trajectory, supported by several favorable factors,” and justifies this with “instability of the external environment and the economic situation.”

Pereira Coutinho insists on consumption cards

Also addressing the “lack” of measures to stimulate consumption and support small businesses, lawmaker José Pereira Coutinho insisted that the issuance of a new round of consumption cards or a similar electronic consumption system could help stimulate consumption and revitalize small and medium enterprises (SMEs).

He suggested that an injection of MOP3,000 or MOP5,000 could help local businesses survive while ensuring that this money would be spent locally and not on the acquisition of goods and services beyond the border.

No forecast for GDP

In response to several lawmakers’ requests, including Ho’s, Tai said the government does not wish to forecast a potentially growing figure for the Gross Domestic Product (GDP) at this time.

On the topic, and similarly to what he had said for the GGR, Tai stated that Macau is significantly affected by geopolitical and external factors, a fact that leads the government to prioritize prudent financial management and avoid being overly optimistic.

Still, he noted that the goal remains to achieve positive economic growth.

According to the International Monetary Fund (IMF), GDP is projected to grow by an average of 3.5% in 2026, a slowdown from the 2024 growth rate. Preliminary data for the first three quarters of this year show that local GDP grew by 4.2%. This growth was driven by a 10.5% increase in service exports, reflecting higher visitor arrivals.

The IMF projects overall real GDP growth of 2.6% in 2025, while the Macau Economic Association projects a full-year growth rate of 4.5% for this year.