Macau’s gross domestic product (GDP) contracted by 7.1 percent year-on-year in real terms in the second quarter of 2016, according to data released on Tuesday by the city’s Statistics and Census Service. It marked the eighth consecutive quarter of GDP decline judged year-on-year, as the city’s gross gaming revenue (GGR) continues to slide, albeit at a slower pace than previously.
The first quarter of 2016 saw a 13.3-percent contraction in the city’s GDP.
The second-quarter rate of contraction was “mainly due to slower declines in service exports and investment, as well as a lower base of comparison in the previous year,” said the statistics bureau.
Exports of gaming services dropped by 12.0 percent from the prior-year period. 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.
Macau’s economy has been negatively affected by 26 straight months of decline in gambling revenue. The aggregate for all casino GGR in the three months to June 30 stood at MOP51.61 billion (US$6.46 billion), down 9.2 percent from a year earlier. That was still slower than the 13.3 percent year-on-year fall in gaming revenue seen in the first quarter of 2016.
The statistics bureau said in its Tuesday statement that a decrease in visitor spending in the second quarter brought exports of other tourism services down by 7.4 percent from the prior-year period. “Domestic demand saw continued slowdown, of which private consumption expenditure diminished by 2.2 percent,” it added.
In the first half of 2016, Macau’s economy declined by 10.3 percent year-on-year in real terms, said the bureau.
Credit rating agency Moody’s Investors Service said in a report in June that it expects Macau’s economy to contract by 6.0 percent in 2016, amid falling gaming revenues. “We expect that growth will continue to contract over our rating horizon of the next two to three years, although the pace of decline should slow,” said Moody’s in its annual credit analysis of Macau.
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"If the [Macau casino] concessions are put up for bid, there will also be a lot of giant Chinese companies, some having nothing to do with gaming, which would like to take over these enormously successful casinos”
Professor emeritus at Whittier Law School in California, in the United States, and a visiting professor at University of Macau