Macau Economic Association (MEA) forecast the city’s economy to experience a low growth in the months from May to July, with the Prosperity Index expected to score between 2.2 and 2.4.
The scores remain within the range considered as “depressed.”
Despite the forecast, the group estimates that the economy will see some growth during the aforementioned three months.
The main reason behind the forecast could be the consumption stimulus put forward by the government, which will kick in at the start of June, as the MEA pointed out in a statement that the stimulus would help to boost internal consumption and economic performance, as well as improve the overall atmosphere of the market.
The group additionally highlighted data from the government’s Statistics and Census Service about the first quarter’s registered capital of new business establishments, which rose by 60 fold year-on-year to reach the figure of MOP13.5 billion.
This, according to the MEA, is a reflection of the business sector’s confidence in the city’s economic development and prospects.
In terms of challenges, judging against the background of hampered external demand, limited internal demand and rising operating costs, the group sees that Macau’s small and medium sized enterprises (SMEs) will continue to face heavy operative stresses and a restrained ability to resist risks.
It further pointed out that in March, 82 companies were dissolved, marking the highest number in nearly a year. The sectors where this predominantly took place was the wholesale and retail as well as industrial and commercial service industries.
About 70% of dissolved companies in Macau during the first quarter of this year were those with registered capital smaller than MOP50,000, generally referred to as small and micro sized enterprises.
The group warned that the local unemployment rate may continue to rise as the operating pressure of various industries in Macau is still significant due to the combined influence of the Covid-19 pandemic and various other uncertainties.
Looking back, the group concluded that the Prosperity Index scores for March and April were 2.2 and 2.1 points, which also fall within the depressed range.
A reason for the weak performance in the two preceding months is that Chinese Consumer Confidence Index plunged to 113.2 points in March, almost reaching the trough of 112.6 points recorded in early 2020, when the Covid-19 pandemic started.
The simultaneous and further contraction of money supply and employment vitality has also pressed hard on the economy. The group pointed out that stock prices of the six casino operators remained weak in March and April.
