UM forecasts up to 44% GDP growth in 2023

The University of Macau (UM) projects that the economy will grow between 20.5% and 44.1% this year, with recovery being more obvious in the second half of the year.

The estimates were published by the university’s Centre for Macau Studies (CMS) and Department of Economics’ Macroeconomic Forecast for Macao 2023.

Scholars predict that exports of services will grow between 35.2% and 82.8%; and the final revenue of the Macau SAR government will remain at around MOP 55.4 billion to MOP 66.1 billion, in 2023.

Based on three different scenarios, the research team noted that the baseline forecast of gross domestic product (GDP) growths are 20.5%, to MOP 211.8 billion (47.7% of 2019’s level), in Scenario 1; 36.5%, to MOP 240 billion (54.0% of 2019’s level), in Scenario 2; and 44.1%, to MOP 253.3 billion (67.0% of 2019’s level), in Scenario 3, respectively.

In December 2022, Fitch Ratings forecast a 46% rebound in 2023 from a 17% decline.

Real GDP levels were expected to remain below those of 2018.

However, the estimates were calculated during that time’s heightened policy uncertainty and a lackluster recovery in mainland China, coupled with the global monetary tightening cycle and recessions in the US and Eurozone, which was expected to affect growth momentum in Hong Kong, Macau and Taiwan.

Meanwhile, the Monetary Authority of Macao (AMCM) forecasted that the local economy will likely rebound from the poor performance of recent years and grow at a double-digit rate in 2023. However, the bureau added that “Macau’s economic recovery would hinge on the evolution of the pandemic and development of major export markets.”

In 2022, the economy of Macau continued to shrink as a result of the pandemic and epidemic prevention policies. In the first quarter, the year-on-year GDP fell by 10.5%. Following the relatively large-scale emergence of infection cases in the local community in mid to late June, the year-on-year GDP collapsed by 39.0% in the second quarter, returning to the level of the second quarter of 2020. From mid-June to July 2022, subject to the influence of the implementation of lockdown measures, the year-on-year GDP decreased by 33.4% in the third quarter.

Meanwhile, with more cautious assumptions of the research team, visitor arrivals are assumed to be 2.07 million in the first quarter (20% of 2019’s level), 2.48 million in the second quarter (25% of 2019’s level), 2.98 million in the third quarter (30% of 2019), and 3.22 million in the fourth quarter (35% of 2019’s level).