Macau GDP set to drop in 2019
According to the Economist Intelligence Unit, Macau GDP is likely to contract by 0.3% in 2019 after the 3.2% drop recorded in the first quarter.
Macau.- Financial results haven’t been the best for the Chinese city of Macau and GDP will be in line with them. According to the Economist Intelligence Unit, Macau GDP is likely to contract by 0.3% in 2019. They released the assessment after the 3.2% drop recorded in the first quarter of the year.
In a recent report, the research and analysis division of The Economist Group said GDP will shrink. It explained it’s due to fewer government investments in public works and no new openings of large-scale casino resorts.
The document also explains that mainland China’s economy would impact in Macau’s GDP, especially in the casino segment.
As reported by the EIU, Macau’s economy will return to growth in 2020, anyway. Then, Macay GDP is likely to increase by 1.6% thanks to new public works projects. Furthermore, the expected opening of the Grand Lisboa Palace casino resort early next year will boost figures.
The gaming segment’s future
Macau continues to post lower figures month-by-month as the US-China trade war continues. That’s why brokerage Sanford C. Bernstein lowered its forecast for the growth rate of Macau’s gaming gross revenue (GGR) for June by 1%.
The financial firm’s analysts explained that the trade war will endanger the industry’s recovery, should it keep going. “Weaker-than-expected macro data for May – along with the recent heightened tension in U.S.-China trade relations – casts uncertainty over the GGR recovery. If a trade war sustains over an extended period, it will likely pose a headwind to China’s economy and gaming spend from China’s high-net-worth individuals in Macau.”
“In the long run, improvements in transportation infrastructure, the continued growth of the premium consuming class in China and the opening and ramping up of new casino resorts will support long-term growth in mass.”
