Macau’s economy to rebound by 2024, analysts say

According to Moody’s Investor Service, Macau’s economy could return to pre-pandemic levels by 2024.

Macau.- Moody’s Investor Service has said that it believes Macau’s economy could rebound to pre-Covid-19 levels by 2024.

Analysts said that although the special administrative region’s (SAR) economy has been seriously hit by the Covid-19 pandemic, Macau maintains strong sovereign finances.

Moody’s has given Macau an Aa3 rating, which means it is subject to very low credit risk. It said: “The growth volatility of Macau’s economy is among the highest of all rated sovereigns.

“But despite the highly volatile nature of economic growth, Macao’s vast fiscal and external reserves — significantly stronger than those of similarly rated peers — and very high per capita incomes continue to support its credit profile.”

However, analysts say Macau’s recovery is highly dependent on a full return of tourist arrivals, but the number of visitors is expected to remain at about 60 per cent of pre-pandemic levels through the second half of the year 2021.

Macau’s tourists come mainly from mainland China and Hong Kong, but currently, Macau only has a form of travel bubble with China. It requires a 14-day quarantine for arrivals from Hong Kong. 

Fitch Ratings Inc has previously predicted Macau’s economy could rebound by 53 per cent this year, helped by strong gaming and tourism recovery in the second half of 2021 if travel restrictions between mainland China and Macau are eased in the months ahead.

A gradual roll-out of Covid-19 vaccination programmes, combined with a quarantine-free travel bubble will also play a key role in Macau’s economic recovery.

However, Macau chief executive Ho Ian Seng has recently said for now there are no plans to relax restrictions on non-resident foreigners entering Macau.

Analysts have suggested Macau should include requirements in the city’s gaming licence criteria to promote the diversification of Macau’s economy, because it is “excessively dependent on tourism and gaming,” 

Macau visitor spending up 23.5% in Q1

The Census and Statistics Service has reported that the total spending of visitors (excluding gaming expenses) increased by 23.5 per cent year-on-year to MOP6.18bn in the first quarter of 2021.

Authorities also revealed that total spending of overnight visitors rose by 48.0 per cent year-on-year to MOP5.59bn, while that of same-day visitors dropped by 52.1 per cent to MOP589m.

Macau’s Public Security Police reported that 165,500 tourists came to Macau during the Labour Day break.

That’s a long way from 2019 levels, when Macau registered 531,000 visitors arrivals during what was a four-day break in 2019 (this year the Labour Day break was extended).

As for GGR, Macau reached an average daily rate of MOP500m (US$75m) for the first nine days of May, including the Labour Day break.