Study shows confidence in early resumption of economic stability

The city’s Prosperity Index may return to the stability level in April – earlier than expected – the Macau Economic Association (MEA) said in a statement yesterday.

To fall into the stability level, the index must achieve at least 5.0 units in the evaluation of the city’s economic momentum.

In the estimate it made in April, the group expected the index to return to the stability level only in June.

As for the months spanning May to July, the association expects the index to range between 5.4 and 5.6 units.

The advantageous factors supporting the association’s estimation include the escalations in data related to tourism activities, such as average hotel occupancy rate in March having reached 77%, generated by the influx of tourists from several source markets.

The average daily gross gambling revenue (GGR) for March and April has also risen to MOP410 million and 490 million. M2 currency supply has seen an historic high as well with year-over-year rise for four consecutive months.

The job market has also seen significantly improved vitality. The unemployment rate has continued to drop and is now 3.1%. Many industries are experiencing workforce shortages and have escalated recruitment efforts. The total employed population has also bottomed out.

May 1 holidays, commonly referred to as the Golden Week, have also seen daily average tourist arrivals at 99,000 and daily average GGR at MOP640 million – both new heights after Covid-19.

Despite the “prosperity,” the association warned about uneven recovery across the market. It said that except for those in tourist areas, small and micro enterprises in traditional residential districts had not yet benefited from this round of recovery. These enterprises have not only not seen recovering businesses, but falling consumption, especially during weekends and holidays. A key reason is that many people have decided to travel out of Macau on holidays, especially under the trigger of the Northbound Travel for Macao Vehicles scheme.

The association said the phenomenon is of social concern because these businesses, usually targeting a local clientele, did not see lime lights shining from either internal or external markets.

It is noteworthy that the external environment is still quite complicated, with sluggish demand in the consumer market, strong risk aversion sentiment in the investment market, and many uncertain and unstable factors. In particular, the rise in the US dollar interest rate has profoundly impacted the global economy and finance, the association said.

The March index has been confirmed as 4.5 units, the association added.