The Macau Economic Association (MEA) has estimated that the Prosperity Indices will see rise in the period from February to May, according to a statement released by the association.
The MEA issues monthly statements alongside its estimates for the Prosperity Index. It also announces the figures for months the indices of which have been confirmed.
Its latest estimates for the city’s Prosperity Indices range from 2.8 points in February to 3.0 points in May. Despite the estimated rise, the indices will still be within the unsatisfactory range.
The Prosperity Index for January has now been confirmed at 2.8 points.
The MEA noted several uncertainties surrounding the recovery of the city’s economy. It noted that, despite a slight slowing in the rise of Covid-19 cases around the world, tourists remain wary of travel because of unstable pandemic conditions in nearby regions, keeping Macau’s tourist arrival counts at a relatively low level.
In addition, the share prices of the six casino operators, which are significant in determining the city’s Prosperity Index, recently plummeted, dampening the forecasts of the Prosperity Indices.
Another factor is that demand for labor is still running low, with the local unemployment rate rising for three months in a row. Combined with weak consumer confidence in mainland China, the indices for the first two months of the year were calculated to be 2.8 points.
External uncertainties, such as the Russian invasion of Ukraine, are also affecting the city’s economic recovery. These affect energy, food and major resources, as both countries are large exporters of goods. After the outbreak of war, prices for food, metal and energy have gone up, the MEA noted, causing global concern about inflation.
The invasion has also caused fluctuations in the price of petroleum, which went up to USD139 per barrel for a period of time. The US Consumer Price Index for February, meanwhile, has increased 7.9% year-on-year and 0.4% month-on-month, a height not reached in four decades.
News about U.S. plans to increase interest rates to 0.5%, if realized, will certainly affect Macau’s own interest rates and flow of funds.
With an economy heavily reliant on imports, the MEA expects that global instability will eventually impact Macau’s economy.
Moreover, as Macau relies heavily on tourists from Guangdong and Hong Kong, the new outbreaks of Covid-19 in these places are certain to affect Macau’s tourism industry.
The MEA therefore estimates that the city’s Prosperity Indices will remain at an unsatisfactory level.
