Macau’s gross domestic product (GDP) increased by 9.1 percent year-on-year in real terms for full year 2017, said on Wednesday the city’s Statistics and Census Service. It was the first such annual rise since 2013 – when the city’s economy expanded by 11.2 percent.
The statistics bureau said the local economy’s growth in 2017 was helped by increases in exports of services and in investment. Gaming services in Macau are included in exports when calculating the city’s GDP. That is in order to reflect spending by tourists in the city’s casinos.
In 2017, exports of gaming services went up by 16.4 percent year-on-year in real terms.
Macau’s GDP performance trends in recent years have coincided with casino gross gaming revenue (GGR) trends in the city, highlighting the importance of the gaming sector to the local economy. The gaming business was negatively affected by a slump in GGR that began in June 2014 and extended for two years.
Annual casino GGR in Macau posted its first increase in 2017, after three consecutive years of annual decline: in 2016, GGR fell 3.3 percent; in 2015, it slipped 34.3 percent; and in 2014, GGR declined by 2.6 percent year-on-year.
Macau’s GDP declined by 1.2 percent in 2014; in 2015, it fell 21.6 percent; and in 2016, it slipped 0.9 percent.
Investment analysts covering the sector have attributed the GGR decline recorded in Macau between mid-2014 and mid-2016 to several factors, including the ongoing anti-corruption drive in mainland China; a slowdown in the Chinese economy; and increased scrutiny by the Macau government focused on the city’s casino junket system.
Also helping Macau’s GDP performance in 2017 was the construction of two casino resorts on Cotai. MGM Cotai, by casino operator MGM China Holdings Ltd, opened doors last month; SJM Holdings Ltd’s Grand Lisboa Palace is aimed to start operations in 2019, according to management.
In the fourth quarter of 2017, Macau’s economy expanded by 8.0 percent year-on-year in real terms, according to Tuesday’s data.
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"The stronger mass growth [in Macau in the second quarter] should be viewed positively vis- à-vis [the] government’s stated priority”
Japanese brokerage Nomura