Macau’s gross domestic product (GDP) could soar by up to 44.1 percent this year, according to the “Macroeconomic Forecast for Macao 2023”, published by the University of Macau (UM). Such sharp increase would be linked to a strong rebound in the city’s tourism and casino sectors, according to the research.
The UM team estimates that economic growth will go up by between 20.5 percent and 44.1 percent year-on-year. Such performance will be aided by the city’s exports of services, forecast to increase between 35.2 percent and 82.8 percent.
The forecast was published on Monday by UM’s Centre for Macau Studies and its Department of Economics.
Exports of services in Macau are mainly composed of gaming services. The latter are included in exports when calculating the city’s GDP to reflect spending by tourists in the city’s casinos.
Macau’s January casino gross gaming revenue (GGR) grew by 232.6 percent month-on-month. January GGR was MOP11.58 billion (US$1.43 billion), according to the city’s regulator, the Gaming Inspection and Coordination Bureau.
Macau’s GDP declined by 33.4 percent year-on-year in real terms in the third quarter of 2022, according to official data. The official figures showed that third-quarter exports of gaming services and other tourism services declined by respectively 72.5 percent and 45.9 percent year-on-year.
Macau’s economic recovery is expected to become “more obvious” in the second half of 2023, noted the statement about the research. “As Macau adjusted its epidemic prevention policies in December 2022, visitor arrivals are expected to increase in 2023,” it added.
Mainland China and Macau scrapped respective ‘zero-Covid’ policies at the start of last month, which has spurred a boom in tourism numbers.
The institution said that, under a “cautious” scenario, visitor arrivals to Macau could reach 2.07 million in the first quarter, the equivalent to 20 percent of the level recorded in 2019, before the onset of the Covid-19 pandemic. Such figure would increase to 2.48 million in the second quarter; 2.98 million in the third quarter; and 3.22 million in the fourth quarter (35 percent of 2019’s level).
The most “optimistic” scenario featured in the UM forecast suggested that visitor arrivals in the second half of 2023 would “grow faster” than in the first six months of the year. In this case, visitors arrivals were expected to reach 3.11 million in the first quarter and 3.97 million in the second quarter. Visitor arrivals in the third and fourth quarters were forecast to reach 6.94 million – i.e., 70 percent of the level recorded in 2019 –, and 7.36 million (80 percent of the 2019 level), respectively.
The UM research team noted that, despite the rosy forecast, there would still be “many challenges on the road to economic recovery”. That included a short-term lack of available manpower, as many imported workers had left Macau during the pandemic. This situation could “hinder the growth of tourism-related industries,” it warned.
