Macau’s economic contraction may be bottoming out as the gaming industry begins to stabilize, says the Monetary Authority of Macau in its latest quarterly research report.
According to the Monetary and Financial Stability Review, Macau’s economy is back on track and could resume growth as early as next year.
“Macau SAR’s current economic adjustment is cyclical, and the sign of bottoming-out is looming. Economic contraction is likely to continue through 2016 but the degree is narrowing as mainly supported by improving net trade,” read the report.
In July, the Gaming Inspection and Coordination Bureau reported Macau gross gaming revenue was MOP 17.8 billion (US$2.2 billion), a 4.5 percent decline year-on-year. The result beat analysts estimates of a 5.5 percent decline.
The Monetary Authority also predicts that the openings of new integrated resorts in 2016 and 2017 will also add to the city’s economy.
“The completion of cross-border infrastructure projects such as the Hong Kong-Zhuhai-Macau Bridge and the new ferry terminal in Taipa, will bring about certain stimulating effects on inbound tourism’, the report stated.
In June, the Economist Intelligence Unit (EIU) forecasted Macau’s real GDP will contract by 5.9 percent this year, with only a partial recovery in 2017.
While Macau’s GDP has been decreasing year-on-year since 14Q4, the Monetary Authority says the economy is contracting at a slower pace.
“Real gross domestic product (GDP) recorded double-digit decline of 20.3 per cent in 2015 as contraction in service exports accelerated. However, the pace of decline has been moderating since the second half of 2015, from 23.7 per cent in the second quarter of 2015 to 13.3 per cent in the first quarter of 2016.”