Stable economic outlook expected through July

Macau’s economy has remained “stable” over the past two months, with the Macau Economic Association (MEA) predicting this trend will continue through July, indicating “remarkable resilience” in the short term.

The association’s latest forecast highlights the uneven trend in Macau’s economic sentiment, noting that weak consumer confidence among mainland Chinese consumers and the share prices of the six local gaming operators have contributed to some indicators remaining low for an extended period.

While acknowledging the “sluggish” performance in consumer confidence among Chinese consumers and the share prices of the six local gaming operators, the association also highlighted that Macau’s money supply M2 has reached a record high, exceeding MOP81 billion, representing an annual increase of 8.8%.

Additionally, indicators such as the number of inbound tourists, hotel guests, and occupancy rates are maintaining relatively high levels, while the average daily gross gaming revenue remained stable in March and April, at MOP634 million and MOP629 million, respectively.

For the first time, the association has included two new indicators – the local residents’ loan-to-deposit ratio and the residential property price index – to more accurately assess Macau’s economic conditions. Both indicators are currently at relatively low levels compared to the past three years, reflecting a “poor” performance rating.

The association highlights a stable outlook for Macau’s economy, reporting an economic sentiment index of 5.8 points for March and April, with projections for May to July indicating it will stay between 5.8 and 6.2.

The Macau Monetary Authority (AMCM) reported earlier this month that, as of the end of March 2025, the loan-to-deposit ratio for local residents at banks had decreased from 51.9% in February to 51.1%. Additionally, the overall loan-to-deposit ratio, which includes non-residents, fell from 79.1% to 75.3%.

In this context, the association highlighted that the loan-to-deposit ratio for local residents has significantly declined from 62.4% at the end of 2022 to 51.1% in March. “This decline in borrowing intentions among residents and businesses reflects a cautious attitude towards current economic conditions and future prospects.”

However, the association believes that the significant decline in interbank lending rates in Hong Kong and Macau since the beginning of this month, along with the potential for the U.S. Federal Reserve to resume interest rate cuts in the second half of the year, could boost local credit demand. This optimism persists despite ongoing challenges related to insufficient capital allocation efficiency and weak investment confidence.

The association highlighted that Macau’s economic outlook is fraught with challenges and uncertainties. It emphasized the importance of focusing on structural adjustments and innovation to enhance long-term stability.
“As a small, outward-oriented economy, Macau must stay alert to potential risks in the short and medium term. It’s important to assess the current situation, review its strengths, and find a balance between ‘what is needed’ and ‘what it does well,” MEA concluded.