The International Monetary Fund (IMF) expects Macau’s gross domestic product (GDP) to grow by 7.0 percent this year and 6.1 percent in 2019, slightly slower than in 2017. The forecast was included in IMF’s latest World Economic Outlook report, published on Tuesday.
The IMF said it expects the global economy to expand 3.9 percent this year and next, a forecast that is unchanged from January estimates.
Macau’s GDP increased by 9.1 percent year-on-year in real terms for full year 2017, according to official data. It was the first such annual rise since 2013, helped by increases in exports of services and in investment.
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 2017, exports of gaming services went up by 16.4 percent year-on-year in real terms.
Macau’s GDP performance trends in recent years have 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 2016, GGR fell 3.3 percent; in 2015, it slipped 34.3 percent; and in 2014, GGR declined by 2.6 percent year-on-year.
Macau’s GDP declined by 1.2 percent in 2014; in 2015, it fell 21.6 percent; and in 2016, it slipped 0.9 percent.
In a detailed report last year, the IMF had noted that the spillover to Macau’s broader economy from the correction to the city’s casino GGR performance between 2014 and 2016 had been “surprisingly limited”, notwithstanding the economic importance of the casino sector.
The institution stated in that earlier report that since 1999 the city’s real GDP had grown by an annual average of 10.6 percent, fuelled “in large part” by Macau’s effective monopoly on casino gaming within China.
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Market-wide VIP baccarat revenue in Macau in the fourth quarter of 2018