Macau GDP drops to less than half of pre-Covid levels in Q1

The gross domestic product (GDP) of Macau declined by a further 8.9% in real terms in the first quarter of 2022, as the contribution from the gaming sector dropped by 25.1%.

Not only was the total down from 2021, but it continued to be a long way below pre-Covid levels, falling back to below 50% of the real GDP recorded in Q1 of 2019, the last Q1 before the virus hit.

With inflation low at 0.3%, nominal GDP was down by 8.6%.

The Macau government noted that visitor arrivals to the Special Administrative Region were up by 8.0%, but overnight arrivals declined. As a result, exports of gaming services were down by 25.1%, while exports of other tourism services were up by 1.9%.

The gaming sector continued to be affected by Covid-related travel restrictions in Q1, typified by a March in which gaming revenue reached its lowest level for 18 months, at MOP3.67bn (£346.3m/€412.6m/$454.2m).

For the quarter as a whole, revenue came to MOP17.77bn. This was down 24.8% from 2021, when revenue had reached MOP23.64bn by this point.
Meanwhile, overall exports of services were down by 4.7%. Exports of goods, on the other hand, rose by 56.8%. Imports of goods rose by 29.0% while imports of services were up by 2.8%.

Household consumption expenditure was down by 10.8%, which the government said was also related to Covid outbreaks in Mainland China. Government consumption, meanwhile, was down by 2.0%.

For the full year 2021, GDP of the region was MOP239.4bn a rise from 2020 but a decrease of 46.2% from MOP445.5bn in 2019.

After the end of the quarter, The International Monetary Fund (IMF) warned Macau that its overreliance on the gaming industry leaves it exposed to future economic headwinds. In consultation discussions with the SAR, the IMF executive board’s said that Macau had been “hit hard by the Covid-19 crisis”.

Author: Raymond Fleming