Macau’s gross domestic product (GDP) shrank by 24.2 percent year-on-year in real terms for the three months to September 30, as the city’s gross gaming revenue (GGR) continues to slide, said Macau’s Statistics and Census Service on Monday. The decline in GDP slowed from the 26.4-percent year-on-year drop seen in the second quarter of 2015, but it marked the fifth consecutive quarter of decline judged year-on-year.
“Economic contraction in the third quarter was attributable to the continuous decline in exports of services, of which exports of gaming services decreased by 37.4 percent year-on-year,” said the statistics bureau. Exports of other tourism services dropped by 15.3 percent from a year earlier, it added.
Gaming services in Macau are included in exports when calculating the city’s GDP in order to reflect expenditure by tourists in the city’s casinos.
Macau’s third quarter GDP was the weakest in real terms since the first three months of 2011, official data show.
Macau’s aggregate casino GGR in the third quarter of 2015 fell by 34.4 percent from the prior-year period, with the VIP segment falling 38 percent year-on-year, according to official data.
In the first three quarters of 2015, Macau’s economy contracted by 25.0 percent in real terms, the statistics bureau said on Monday.
The city’s casino GGR monthly tally has fallen for 17 consecutive months, judged year-on-year, since June last year. GGR is down 35.5 percent in the first 10 months of 2015 compared to the prior-year period.
Fitch Ratings Inc said in a September report it expects Macau’s economy to shrink by 16 percent year-on-year in real terms in full-2015. The ratings agency said the GDP contraction “underscores the risks to Macau’s economy from its heavy reliance on gaming revenues from Chinese visitors, and its vulnerability to shifts in mainland government policy”.
Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau, is due to report GGR for November on Tuesday. Based on unofficial industry returns, investment analysts said they expect November gaming revenue to fall between 30 percent and 32 percent year-on-year.
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”China has been strengthening the control over capital flow, and the impact of that has already been reflected [on Macau’s gaming revenue trend]. There should not be any bigger impact from the new… legislation [on the mainland] … on the gaming revenue trend here”
Wilfred Wong Ying Wai
President of Macau casino operator Sands China