MEA forecasts 17.5% GDP growth in first half

The Macau Economic Association (MEA) has forecast the local economy will post year-on-year growth of about 17.5% in the first semester (H1) of this year, according to the association’s latest release on the trend of the Macau Economic Prosperity Index.

Despite uneven economic development in the first half of this year, the MEA concluded overall economic growth was stable, driven by factors such as increased tourist arrivals and service exports.

In the second quarter (Q2), gross gaming revenue (GGR) recorded 56.43 billion patacas, a year-on-year increase of 24%. The GGR for the first half of the year reached 113.75 billion patacas, a year-on-year increase of 41.9%, achieving 52.7% of the full-year budget target of 216 billion patacas.

“Based on the currently published data, comprehensive analysis, and calculation, due to the slightly higher base number in the second quarter of last year, Macau’s GDP growth rate in the second quarter of this year is predicted to be about 10%, with a forecast for the first half of the year of about 194.5 billion patacas,” the association noted.

“The annual growth rate is approximately 17.5%, which amounts to an approximately 87.5% recovery to the pre-pandemic period (2019).”

However, the MEA cautioned that “based on the effect of Macau’s higher GDP base in the second quarter of last year, it is expected that the GDP growth rate may slow down.”

The MEA also highlighted the polarization of individual indicators within the Economic Prosperity Index system.

“On the one hand, indicators such as the number of guests, hotel occupancy rate, total employed population, unemployment rate, and money supply M2 have performed satisfactorily and are at the ‘hot’ or ‘overheated’ level of the prosperity indicator system.”

“But, on the other hand, the mainland consumer confidence index and stock prices of the six major comprehensive tourism and leisure companies have remained at the ‘downbeat’ level for a long time, reflecting that Macau’s external environment is still unclear and there are still many uncertainties.”

The association also noted a drop in GGR in June, which fell to the lowest level this year at 17.69 billion patacas. The average daily gross revenue also fell below 600 million patacas, slightly lower than market expectations.

Considering these factors, the MEA has predicted the values of the Macau Economic Prosperity Index in May and June this year will be 6.4 and 6.3 points respectively, and will maintain a ‘stable’ level.