Fitch Ratings Inc forecasts Macau’s gross domestic product (GDP) growth to slow to 6.9 percent this year from 8.8 percent in 2024, as the city’s gross gaming revenue (GGR) “is likely to rise more gradually to roughly 81 percent of its 2019 level, after a rebound in 2024”.
The commentary was part of a Tuesday report in which the institution affirmed Macau’s long-term issuer default rating at “AA”, with a “stable” outlook.
In its latest report on Macau, a special administrative region of China, Fitch analysts George Xu, Jeremy Zook and Jan Friederich wrote: “We expect GDP growth to be supported by continued, but slower, gaming tourism recovery, along with favourable visa policies for mainland visitors, non-gaming investments and enhanced tourism infrastructure.”
They added: “However, a sharp slowdown in the Chinese economy, such as from substantial U.S. tariff hikes, and sharp yuan depreciation pose downside risks to Macau’s prospects.”
Macau casino GGR for calendar year 2024 stood at MOP226.78 billion (US$28.32 billion), up 23.9 percent year-on-year, according to official data.
The number of visitor arrivals to Macau reached 34.93 million in full-year 2024, according to official figures. Macau’s tourism boss said in mid-January that Macau might be able to draw “38 million to 39 million” visitors this year, a level “very close” to the pre-pandemic trading year of 2019.
Fitch expects the mass-market segment “to continue to drive Macau’s GGR recovery in 2025, spurred by solid visitation growth from mainland China”.
“We expect the stringent regulatory framework for junket operations and strict oversight of illegal cross-border gambling will continue to constrain the VIP segment recovery, which remains about 60-percent below its pre-pandemic level,” stated the analysts.
The institution observed that the city’s diversification efforts faced “challenges”.
“We expect Macau’s new Chief Executive will outline plans in an upcoming policy address to expedite diversification towards strategic non-gaming industries, forge closer collaboration with mainland partners to accelerate development of the Hengqin cooperation zone, and enhance social welfare with additional support to small businesses and individuals,” suggested the ratings agency.
“However, human capital constraints and skill mismatches will remain key challenges to significantly reduce Macau’s heavy dependence on gaming sector in the near term, and we expect Macau’s gaming dependence to persist,” it added.
Fitch also forecast Macau’s budget surplus to “rise modestly” to 4.2 percent of GDP in 2025 from an estimated 3.9 percent in 2024.
“Stronger fiscal performance reflects our expectation that revenue collection will exceed the 2025 target, whereas current and capital expenditures will be under budget,” said the institution.
According to the Macau government’s 2025 budget plan, revenue from gaming taxes is anticipated to reach nearly MOP93.12 billion this year. The local authorities have forecast MOP240.0 billion for 2025 casino GGR, or MOP20.0 billion a month, according to the budget plan for the current year.
