Macau’s economy slumps at record rate

Posted: Jul 01, 2020 14:47 Category: Asia , Posted by Katy

University of Macau predicts Macau’s GDP this year is likely to return to 2004 levels

In response to this year’s forecast of Macau’s economy, the University of Macau issued a research report analysed by pointing out the number of passengers and game income affecting the growth of the economy in Macau to a greater extent than before, and the impact of factors such as the regularisation of the pandemic prevention measures.

China’s economic growth will not be higher than 2%, so Macau’s GDP (GDP) will likely shrink significantly this year to the level of 2004; if the economy rebounds in the following half year, the GDP may return to the level of 2005. The final revenue of the government will be greatly reduced to about 8 billion euros.

The University of Macau recommends that Macau’s economic policies and goals this year should focus on stabilising the labor market.

The epidemic mainly affected the economic growth. A research team composed of the Macau Research Center of the University of Macau and the Department of Economics pointed out that the difference between Macau and other economies is that the two variables of employment and prices affect Macau’s economy more than other countries.

This pandemic was considered a short-term economic volatility, but since it has continued for more than two quarters throughout 2020, it has a considerable negative impact on the growth of the whole year. In addition, the number of tourists visiting Australia today is far more than it was in 2003, so Macau’s eonomy cannot be supported by China’s “free travel” as it did during the “SARS” in 2003.

The slowdown in the further growth of the Chinese economy also includes adverse factors such as the Sino-US trade war. The situation of the Macau’s economy is not optimistic at the moment, but an economic recovery can still be expected. Macau has a healthy financial business environment and reasonable price levels.

The University of Macau recommends that Macau’s economic policies and goals this year should focus on stabilising the labor market (avoiding excessive business closures and failures and maintaining producer and consumer confidence), and then promoting short-term economic recovery and avoiding deep declines.

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