Macau set to see decline in GDP growth to 6.8%: economist

A local economist has revised Macau’s 2025 GDP growth forecast down to 6.8% based on conservative economic data from the past year and the first quarter of this year. Kwan Fung indicates that the impact of U.S. tariffs on Macau’s trade growth will be limited.

The Centre for Macau Studies and the Department of Economics at the University of Macau (UM) released their revised macroeconomic forecast for 2025 yesterday and hosted a quarterly forum on the city’s economic development. Kwan Fung, assistant professor of the Department of Economics, served as the project coordinator.

On the sidelines of yesterday’s forum, Kwan cited the latest official figures to note that the baseline for Macau’s GDP in 2025 has been revised downward from 7% at the beginning of the year to 6.8%.

Global economic variables and US tariff policy contributed to the downward adjustment. He emphasized that Macau’s economy heavily relies on tourists from mainland China and their spending. However, considering the current global economic landscape and the effects of US tariffs, global trade is forecast to contract in the near future, affecting the growth of individual economies, including China.

Kwan did not elaborate on the impact of the U.S.-China trade war on U.S.-owned companies operating casinos in Macau, reiterating that, “for me, it is not considered an economic issue […] Unless there are significant changes, such developments are generally outside the scope of economic considerations”.

He noted that while the U.S. tariff policy could reduce the scale of global trade, Macau’s goods trade volume is quite small, meaning the direct impact of tariffs on Macau’s economy would be minimal.

The economist emphasized that while the direct impact of the US tariff policy on Macau’s economy is limited, a decline in tourists’ spending power may indirectly affect the local economy.

On the contrary, Kwan said that he believes global investors may reevaluate their objectives in light of the more significant tariff increase. Macau’s economy, on the other hand, will need to continue adapting to global changes and seeking new development opportunities.

Meanwhile, according to Kwan, the baseline forecasts for key economic variables include a 6.8% growth in service exports, a 3.8% rise in private consumption expenditures, an inflation rate of 0.7%, an overall unemployment rate of 1.7%, a local unemployment rate of 2.3%, and a projected nominal value of the government’s recurring revenue of 116.8 billion patacas. Yuki Lei