The University of Macau has predicted that economic growth in the city will decline by between 26.4 per cent and 29.2 per cent year-on-year.
Macau.- The University of Macau’s Macroeconomic Forecast for Macau 2022 predicts that gross domestic product (GDP) could fall by between 26.4 per cent and 29.2 per cent year-on-year.
The report states: “In the first half of 2022, the economic conditions for Macau were extremely challenging. The Macau government was forced to maintain stringent travel restrictions due to the different degrees of Covid-19 epidemic in neighbouring regions.”
According to the report, tourists will be unlikely to return to Macau if overly strict restrictions on travel are maintained. Analysts stressed: “Without tourism revenue, Macau’s economy may not be able to develop normally.”
In the second quarter of the year, the city’s GDP fell by 39.3 per cent in real terms over the same period in 2021. Exports of services declined by 48.6 per cent year-on-year, and exports of gaming services and other tourism services by 69.6 per cent and 41.4 per cent respectively.
Earlier this week, Macau’s chief executive, announced that tour packages from mainland China will resume in November. Seng also announced the return of electronically-issued exit visas for Chinese residents, including the Individual Visit Scheme (IVS).
Package tours will resume in phases starting in November with Shanghai, Guangdong, Fujian, Jiangsu, and Zhejiang provinces. Macau’s chief executive said he hoped the move could double the number of visitors to the city to 40,000 a day.
DS Kim, an analyst at JP Morgan, has recently predicted the industry’s mass GGR could recover to 25-30 per cent of pre-Covid-19 levels in the fourth quarter before increasing further in 2023.
He added: “Most operators can turn EBITDA [earnings before interest, taxation, depreciation and amortization] positive when mass GGR hits around 30-35 per cent of pre-COVID levels… indicating some companies can start to print positive profits from 4Q. “