IMF forecasts economy to shrink by 52.3%

The International Monetary Fund (IMF) has updated its forecast of the performance of Macau’s economy this year.
According to the IMF’s World Economic Outlook for Macau, the local economy is likely to contract by 52.3%.
The figure represents a dramatic update of the last predicted scenario which, in April this year, pointed to a contraction of only 29.6%.
In the previous report, the IMF also made a positive forecast for economic recovery post-Covid-19, announcing a forecast growth of 32% for 2021. This time, the fund has slimmed down such prospects, forecasting a less positive outlook. Still, the updated prediction notes that the local economy should grow 23.9% next year.
The IMF indicators for unemployment and inflation rates also underwent minor adjustments in the current report. The unemployment rate moved from the previously predicted 2% for 2020 to 2.3% and from 1.8% for 2021 for 2%, forecasting in this way a slower recovery than initially expected before the first half of the year.
Following the trend of less money and less employability, the inflation rate was also corrected, and is now expected to stay at 1.7%, 0.5% lower than previously forecasted, growing only slightly to 1.8% by 2021.
The new forecasts follow the recent trend resulting from the continuous weak results from the gaming industry and take into account the poor performance during the “Golden Week” of the National Day, which usually contributes significantly to the results of the last quarter of the year.
According to the latest report on gaming revenues, which included only the first nine months of the year, such revenue has fallen by 82.5% year-on-year to only MOP38.6 billion, plunging the whole economy, which is highly reliant on spending from mainland visitors, into decline.