Macau’s real GDP will contract by 5.9 percent this year, said the Economist Intelligence Unit (EIU) in a report published on Monday.
“We continue to believe that Macau’s economy will contract further this year, with a partial recovery only in 2017. The territory will struggle to identify high-value sustainable activities that could provide the support to GDP growth previously provided by the gambling industry,” it said.
Gross gaming revenue for the SAR fell 11.9 percent year-on-year in the first five months of 2016.
While the development of the MICE industry was seen as a possible plug for lost revenue, this has not been the case, with events down 20 percent year-on-year in 16Q1, added the report.
“Such events will not replace gambling-oriented tourism expenditure in 2016-2017 … the industry remains small, attracting a trickle of visitors and revenue,” the EIU said. “Gambling will remain the dominant sector for the foreseeable future.”
However, the EIU said that it forecasts a 5.3 percent GDP growth in 2017, due to more spending from mass-market consumers which will begin the second half of 2016.