MEA forecasts the economy to remain ‘stable’

The Macau Economic Association (MEA) has released its latest report on the “Macau Economic Sentiment Index.”

In the report, the association notes that it is expected to remain “stable” despite the gross domestic product (GDP) in the third quarter (Q3) being projected to decline by about 2% year over year.

According to MEA, the recent high number of visitor arrivals might provide enough support to keep the local economy on track.

“Benefiting from visitor arrivals continuing to hit new highs, which have translated into substantial market demand, relevant economic indicators, such as hotel and inn guest numbers and occupancy rates, have consistently remained in the ‘slightly overheated’ or ‘overheated’ categories,” the MEA said in a statement.

The same groups noted that “electronic payment transaction volume data for the food and beverage and retail sectors indicate that consumer spending momentum among residents and visitors remains robust.”

Despite these positive indicators, MEA notes that the gaming industry’s underperformance is impairing growth.

“The gaming performance fell slightly short of expectations. Gross gaming revenue (GGR) in August and September totaled MOP21.9 billion and MOP18 billion, respectively (averaging approximately MOP706 million and MOP602 million per day), both showing a slight year-over-year decline of 1.2%,” they noted.

On the labor market, the association noted that it “maintained a positive trend,” with both the overall unemployment rate and the unemployment rate among local residents remaining low.

“Based on a comprehensive analysis and projection of various economic indicators, Macau’s Economic Sentiment Index for August and September of this year stood at 6.3 and 6.1 points, respectively, with the overall economy remaining within the ‘stable’ range.”

Q3 GDP expected to decline by 2%

The slowdown in the gaming industry weighed on Macau’s Q3 economic performance. In August, visitor arrivals in Macau rose 6.1% year-over-year. Still, the shift was structural: “an 11.7% increase in same-day visitors and a 2.4% decrease in overnight visitors,” along with lower-than-expected gross gaming revenue in September.

“Based on a comprehensive analysis of macroeconomic indicators and the latest market trends, Macau’s Q3 GDP is projected to be MOP102.9 billion (forecast range: MOP101.9 billion to MOP103.9 billion), representing a year-over-year real decline of approximately 2% (forecast range: -2.7% to -0.8%).” 

Combined with GDP growth in the first half of the year (7.2% in the first quarter and 0.3% in the second quarter), the cumulative GDP forecast for the first three quarters is approximately MOP311.8 billion to MOP313.8 billion, representing a real annual growth rate of about 1.5% to 2.1%, indicating that the economy’s fundamentals continue to support a moderate pace of recovery.

Credit volume continues to decline

MEA noted that in August, Macau’s broad money supply (M2) set a new historical record, rising to MOP867.8 billion and signaling extremely ample liquidity in the banking system. However, the banking sector’s loan-to-deposit ratio for local residents continued to decline to 42.2%, indicating that despite ample liquidity, banks remain relatively cautious in their lending.

Market demand for credit and the momentum of credit expansion have weakened, indicating that financing and investment activities among banks, enterprises, and residents remain conservative.

Looking at personal loans, June 2026 data show the outstanding balance at MOP300.43 billion, down 4.2% year over year from MOP313.63 billion in the same period last year. Across all categories of personal credit, demand for large-scale financing has generally declined.

For mortgages, the outstanding balance of personal mortgage loans fell from MOP188.15 billion to MOP182.55 billion, a year-over-year decrease of 3%, while the outstanding balance of auto loans fell from MOP1.04 billion to MOP960 million, a significant year-over-year decline of 7.1%. Similarly, the MEA noted a sharper drop than in housing mortgages, adding, “The continued contraction in personal credit reflects residents’ cautious attitude toward major consumer expenditures, such as home and car purchases, as well as a lack of momentum in these areas.”

Q4 expected to remain in the ‘stable’ range

Looking ahead to the fourth quarter (Q4), the National Day Golden Week demonstrated the resilience of Macau’s tourism market. Accelerating the expansion of international visitor markets, optimizing flight route networks, deepening cooperation between Hong Kong and Macau, and promoting “multi-destination” travel will broaden the visitor base and further strengthen economic fundamentals and resilience.

The consumer market is expected to remain vibrant, with the economic sentiment index likely to remain within the “stable” range of 6.2 to 6.3 points.