Macau’s gross domestic product (GDP) shrank by 26.4 percent year-on-year in real terms for the three months to June 30, said the city’s Statistics and Census Service on Monday. The decline in GDP accelerated from the 24.5-percent year-on-year drop seen in the first quarter of 2015, as the city’s gross gaming revenue (GGR) continues to slide.
The statistics bureau said the local economy’s contraction was mainly due to a decline in exports of services. Gaming services in Macau are included in exports when calculating the city’s GDP. That is in order to reflect expenditure by tourists in the city’s casinos.
In the April to June period, exports of gaming services tumbled by 40.5 percent year-on-year, while exports of other tourism services dropped by 21.5 percent from the prior-year period.
Macau’s second quarter fall in GDP from a year earlier is the deepest on record since quarterly numbers were first issued, with effect from 2002, according to official data. The decline took Macau’s GDP to about MOP77.5 billion (US$9.7 billion) at constant prices, making it the weakest quarter since the first three months of 2011.
Casino GGR contracted 37.4 percent year-on-year in the second quarter of 2015. Macau’s VIP baccarat GGR fell 42.2 percent year-on-year in the three months to June 30, while mass-market revenue – including slots and electronic table games – fell by 30.2 percent.
The city’s casino GGR monthly tally has fallen for 14 consecutive months, judged year-on-year, since June last year.
Macau’s GDP growth for the whole of 2014 was nearly flat, contracting by 0.4 percent in real terms, official data showed.
In the first six months of 2015, Macau’s economy contracted by 25.4 percent year-on-year in real terms, according to Monday’s data.
The local economy “was affected by multiple unfavourable factors in the first half year; sluggish external demand dragged down exports of tourism and gaming services,” said the statistics bureau. It added: “Domestic demand remained stable; total investment rose by 15.8 percent while private consumption expenditure and government final consumption expenditure maintained stable growth, reducing the magnitude of economic slowdown.”
In July, the city’s Monetary Authority of Macao said Macau’s real GDP might contract “mid-teens” for the whole of 2015. In its latest monetary and financial stability review, the monetary authority cited the “deterioration in gaming revenue” as a factor.
Contraction in GDP “could slow to low teens in the second half, depending on the gaming performance,” it stated.
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal