Macau’s gross domestic product (GDP) fell by 1.8 percent year-on-year in real terms in the second quarter 2019, said on Friday the city’s Statistics and Census Service. It was the second consecutive quarterly decline, as the slowdown in the city’s gaming industry continued during the period. It was however a smaller decrease compared to the 3.2-percent decline in the first three months of 2019.
Macau’s economy shrank in the quarter ended June 30, led by reductions in domestic demand and in exports.
Real exports of gaming services from Macau – a measure of what visiting gamblers contribute to gross domestic product (GDP) – were down 0.8 percent in value in the second quarter of this year than a year earlier, according to official data. That was an acceleration from the 0.6 percent year-on-year decline recorded in the first quarter.
Casino gross gaming revenue (GGR) in Macau – a measure of casino industry performance – fell by 0.5 percent year-on-year in the three months to June 30. Such GGR was MOP73.35 billion (US$9.08 billion), according to data issued on July 1 by the local casino regulator, the Gaming Inspection and Coordination Bureau.
In Friday’s written statement, the statistics service said: “External demand continued to slow down; exports of gaming services fell by 0.8 percent and exports of goods slid by 24.4 percent. Domestic demand went down by 6.1 percent year-on-year, dragged down by a 25.0-percent drop in gross fixed capital formation.”
It added: “Private consumption expenditure and government final consumption expenditure rose by 2.2 percent and 5.7 percent respectively, offsetting part of the decrease resulting from the economic slowdown.”
The statistics bureau said consumer sentiment in the second quarter “remained cautious amid uncertain external economic environment”.
Investment in fixed assets continued to decline in the April to June period on account of fewer construction projects. Gross fixed capital formation dropped by 25.0 percent year-on-year in real terms in the second quarter owing to a 30.1-percent fall in construction investment, the data showed.
Private investment slid by 19.3 percent year-on-year following a decline in investment in large-scale construction projects and a drop in number of new residential projects, added the statistics service.
Macau’s economy shrank by 2.5 percent year-on-year in real terms in the first half 2019. While private consumption expenditure and government consumption expenditure rose in year-on-year terms, investment dropped by 28.8 percent. Exports of services during the period went up by 0.2 percent, but exports of gaming services fell by 0.7 percent.
The International Monetary Fund forecast in May that the annual rate of growth in GDP in Macau would be 4.3 percent this year and plateau around 4 percent in the medium term.
Macau’s GDP increased by 4.7 percent year-on-year in real terms last year, according to the city’s Statistics and Census Service. GDP was 9.7 percent for 2017.
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract