Group forecasts economy will recover from its worst troubles 1H2023
Considering the recovery from the July low, the Prosperity Index will likely recover from its unsatisfactory performance in the first half of next year, the Macau Economic Association (MEA) estimated.
It also forecasted the indices for the next three months to range between 2.3 and 2.4 points.
The index run to a long-term new low of 1.2 points in July, generally due to the Covid-19 outbreak and subsequent restrictions that started on June 18. In the following month, the index saw an astonishing increase of an entire point, bringing the index up to 2.2 points.
The main reasons for the recovery were the return of tourists, hotel occupancy and gambling revenue, the MEA said. In addition, cargo imports has also jumped to MOP11.66 billion, a 2.6-fold increase from July, as well as a 0.4% rise in M2 money supply, which was an end to a nine-month decline.
Another helpful factor, the MEA highlighted, is the resumption of group tours to Macau and travel endorsement online application for mainland Chinese. In the first phase of the resumption, the policy change will take place in Guangdong, Zhejiang, Jiangsu and Fujian Provinces, as well as in Shanghai Municipality – colloquially referred to as four provinces and one city.
Moreover, the reinvigoration of tourist arrivals during the Mid-autumn Festival holidays and the October 1 holidays was also worth mentioning. On October 1 the city saw over 37,000 entries, which was the second highest number in a single day.
The MEA suggested that, with the non-gambling requirements set forth in the re-tender documents for casino licenses and the government’s planned multitudes of public construction projects, the economic decline should be short-term.
In spite of the positive factors, certain external factors remain uncertain and may bring fluctuations to the city’s conditions, the MEA warned.
It recapped that recently, the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF) and the WTO had shrunk their forecasts for next year’s global economic growth.
They also generally expect that most of the world’s major economies will continue to raise interest rates next year to cope with inflation, with global economic growth slowing down. Financial markets and asset prices may be affected and will continue to face severe tests. Some European countries may even fall into economic recession.
Internally, the MEA stressed that the situation of bad loan ratios in Macau of local and non-local residents has risen to a decade-high at 0.94% and 0.93% and is concerning.
