Macau facing 30-year low

The economy in Macau is heading for its biggest recession in over three decades if current gaming revenues persist for the rest of the year.

Such a scenario would see GDP shrinking 14.7 per cent, according to the economics department at the University of Macau. If the “new norm” of MOP20bn (US$2.5bn) monthly gaming revenues persists for the rest of the year, GDP will decline to MOP323bn from MOP378.8bn in 2014.

“If the gross gaming revenue continues at MOP60bn per quarter, Macao’s GDP is expected to decline at a rate of 14.7 per cent, ranging from a pessimistic estimate of 20.4 per cent to an optimistic estimate of 9.4 per cent in 2015,” the department said.

“Data and our forecast indicate the possibility of continuous adjustment of Macau’s growth in 2015. Given that the gross gaming revenue is greatly influenced by government policies and is subject to adjustment throughout the year, as reflected by short-term fluctuation, we will update the forecast to reflect the possible adjustments.”

Macau could find itself in its worst economic situation since 1982, when GDP dropped seven per cent. However, the industry may take some comfort from the outlook that the second half of the year should provide a boost for the economy. “The opening of new casinos and hotels in the second half of the year should ease the decline,” the department added.