Macau’s gross domestic product (GDP) increased by 4.7 percent year-on-year in real terms for full-year 2018, said on Thursday the city’s Statistics and Census Service. It was the second consecutive annual rise, boosted by revenue growth in the city’s gaming industry.
The statistics bureau said the city’s economic growth in 2018 was helped by increases in exports of services and in private consumption. Gaming services in Macau are included in exports when calculating the city’s GDP. That is in order to reflect spending by tourists in the city’s casinos. In 2018, exports of gaming services went up by 10.3 percent year-on-year in real terms.
In 2018, the city’s GDP amounted to MOP440.3 billion (US$54.46 billion), said the statistics bureau.
Macau’s GDP performance trends in recent years have broadly coincided with casino gross gaming revenue (GGR) trends in the city, highlighting the importance of the gaming sector to the local economy. The gaming business was negatively affected by a slump in GGR that began in June 2014 and extended for two years.
Annual casino GGR in Macau posted its first increase in 2017, after three consecutive years of annual decline. In 2018, Macau’s accumulated casino GGR grew by 14.0 percent compared to the tally for 2017, according to official data.
Macau’s GDP increased by 9.1 percent year-on-year in real terms in 2017, marking the first such annual rise since 2013.
In the fourth quarter of 2018, Macau’s economy expanded by 2.1 percent year-on-year in real terms, showed Thursday’s data.
The International Monetary Fund (IMF) expects Macau’s economy to grow by 5.3 percent this year “and to remain solid over the medium term at about 5 percent.” The forecast was included in IMF’s latest report on Macau, published on Monday.
“The main driver of medium-term growth is tourism, with mass gaming and non-gaming tourism further expanding, but more subdued VIP gaming growth, in line with authorities’ diversification efforts towards more stable sources of growth,” said the IMF.
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"The Hong Kong protests may hurt Macau gross gaming revenue by about mid-single-digit (i.e., half of maximum visitation exposure), which should fade away gradually as people will find alternative ways to visit Macau”
DS Kim, Jeremy An and Christine Wang
Analysts at brokerage JP Morgan Securities (Asia Pacific) Ltd