Macau’s gross domestic product (GDP) fell by 4.5 percent year-on-year in real terms in the third quarter 2019, said on Friday the city’s Statistics and Census Service. The decline in GDP in the three months to September 30 widened from the 1.8-percent fall recorded in the second quarter, and marked the third consecutive quarterly economic decline as the slowdown in the city’s gaming industry continued during the period.
Macau’s economy shrank in the quarter ended September 30, mainly led by what the census service said was as a “larger decline in exports of services”.
Real exports of gaming services from Macau – a measure of what visiting gamblers contribute to GDP – were down 4.2 percent in value in the third quarter of this year than a year earlier, according to the official data. That was an acceleration from the 0.8 percent year-on-year decline recorded in the second quarter.
Third-quarter exports of gaming services were “dragged by a steeper decrease in VIP gaming business,” the census service noted in its Friday release.
Casino gross gaming revenue (GGR) in Macau – a measure of casino industry performance – fell by 4.1 percent year-on-year in the three months to September 30. Such GGR was MOP70.79 billion (US$8.78 billion), according to data issued on October 1 by the local casino regulator, the Gaming Inspection and Coordination Bureau.
In the third quarter, Macau VIP GGR had declined market wide by 22.5 percent year-on-year, showed data released on October 17 by the city’s government.
In Friday’s written statement, the statistics service also highlighted a 12.4 percent drop in real exports of other tourism services in the third quarter, as the per-capita spending of both overnight and same-day visitors dropped during the period.
The statistics bureau said of the third-quarter economic performance: “Merchandise trade slackened. In spite of a sustained growth in private consumption, imports of goods merely increased by 1.6 percent year-on-year owing to the continued decrease in investment.”
“External demand slowed down, with exports of goods rising slightly by 0.5 percent,” it added.
Investment in fixed assets recorded a slower decrease in the July to September period, according to the official data. Private construction investment slid by 26.3 percent year-on-year following a decline in investment in residential projects and a corresponding drop in property developers’ operating margin, added the statistics service.
Macau’s economy shrank by 3.5 percent year-on-year in real terms in the first three quarters of 2019. While private consumption expenditure and government consumption expenditure rose in year-on-year terms, investment dropped by 22.1 percent. Exports of services during the period fell by 1.9 percent, with exports of gaming services declining by 2.0 percent.
The International Monetary Fund (IMF) said in its latest World Economic Outlook report published last month that it expected Macau’s GDP to fall by 1.3 percent this year and by 1.1 percent in 2020.
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"The Macau recovery continues to be disrupted by false starts, while the lack of [Chinese] public holidays for rest of the year should cap the pace of the rebound”
Andrew Lee and David Katz
Analysts at brokerage Jefferies LLC