UM forecasts economic growth to drop up to 29% in 2022
The University of Macau (UM) estimates that economic growth will drop between 26.4% and 29.2% this year.
This is followed by a drop between 31.3% and 33.6% of exports of services, while the current revenue of the Macau SAR government is expected to be between MOP 29.3 billion and MOP 33.3 billion, the university’s Centre for Macau Studies and Department of Economics estimates.
In the first quarter of 2022, the GDP fell by 8.9% year-on-year. Following the relatively large-scale emergence of infection cases in the Macau community beginning in mid-June, the GDP fell sharply by 39.3% year-on-year in the second quarter, returning to the level of the second quarter of 2020.
Due to the city’s largest outbreak in June to July, the economy continued to deteriorate as Macau underwent 14 rounds of mass testing and a two-week lockdown – including closure of non-essential business activities.
In line with this scenario, local economists were not only alarmed by these figures but also anticipate that the results from the second half of this year could be as bad as the first: predicting 2022 to be a historic year for all the wrong reasons.
Previously, economists such as Albano Martins were quoted saying that though the data was alarming, it was natural that the GDP would fall substantially since the economy is at a standstill.
The UM scholars, however, took into account the vaccination situation in Macau and the experience of other countries and places in gradually opening up, and assumed that Macau would be gradually opening up to varying degrees in 2022.
However, the city continues to adhere to Beijing’s zero-Covid policy where lockdowns and mass testings are done to contain the virus.
Therefore, in response to possible changes in the pandemic and government policies, the team has put two different scenarios into consideration. The first scenario assumes stable growth in the fourth quarter of 2022 and that the number of visitor arrivals will return to the level of the fourth quarter of 2021 of 1.95 million. The team also considers a scenario with worse conditions: Macau will face one more month of lockdown, with only 1.31 million visitor arrivals.
Further, the scholars forecasted that the unemployment rate is projected to be between 3.8% and 4.0%. Excluding non-resident workers, the unemployment rate for residents is expected to be 4.9% to 5.1%.
Recent data shows that the unemployment rate of local residents for May-July 2022 rose to 5.4%, a record high since 2008, according to the available data disclosed by the government.
Lawmakers have already called on the government to enact additional and more effective measures to promote the employment and reemployment of local workers affected by the Covid-19 crisis.
