IMF: Macau’s economy to grow by 58.9% in 2023

The IMF forecasts a continued double-digit growth rate in 2024.

Macau.- Macau’s economy is predicted to grow by as much as 58.9 per cent in 2023, according to a forecast by the International Monetary Fund (IMF). The GDP growth forecast for 2024 is 20.6 per cent, while growth of 8.5 per cent is estimated for 2025. These predictions come after three consecutive years of economic contraction due to strict Covid-19 prevention measures. 

The IMF predicts that the unemployment rate will drop to 2.7 per cent this year and that prices will grow no more than 2.5 per cent. In 2022, Macau experienced a decline of 26.8 per cent in GDP.

Fitch Ratings previously forecasted a 48 per cent economic rebound for Macau in 2023. The rating agency attributed the recovery to the city’s gross gaming revenue (GGR), which could recover to “about half of the 2019 level” this year. 

According to analysts, due to its geographic proximity to mainland China and its status as the only legal gaming tourism destination for Chinese gamblers, Macau is well situated to capture pent-up mainland demand. They expect the mass-market segment to continue to drive gaming revenue this year.

The Macau Government Tourism Office has previously stated that the city could reach its 20 million visitor target by the end of the year, based on first-quarter visitation of around 5 million visitors.  Industry experts predict that Macau’s recovery could accelerate in the second half of the year, as the gross gaming revenue has continued to improve even during periods deemed to be ‘low season’.

The city collected MOP19.11bn (US$2.39bn) in fiscal revenue from direct taxes on gaming in 2022, down 44 per cent when compared to the previous year. It recorded only 5.7 million visitor arrivals, down 26 per cent year-on-year.

Macau GGR to reach US$20.78bn in 2023, analysts say

Analysts at Deutsche Bank have predicted that Macau’s gross gaming revenue (GGR) will reach US$20.78bn in 2023, a 293 per cent increase from last year. However, this would still be 43 per cent lower than pre-pandemic levels in 2019.

Analysts estimate that US$15.1bn will come from the mass-market, with the remaining US$5.6bn from VIP gaming. This shift in revenue is a result of operators’ efforts to reduce dependence on high-rollers.

The Gaming Inspection and Coordination Bureau (DICJ) has reported that Macau’s gaming industry generated MOP12.73bn (US$1.57bn) in GGR in March – down 50.7 per cent compared to March 2019. For the first quarter of 2023, gaming revenue was MOP 34.6bn, representing a 94 per cent year-on-year increase.