Macau, China, 12 March – The projection for economic growth in Macau in the long term remains although in the short term that projection is less secure, according to the March 2009 report from the Economist Intelligence Unit.
The report, cited by news agency MacauNews, said that the situation was due to “the halting of construction work on several major casino resorts in the wake of the global credit crisis and the decision by the [mainland] Chinese government to tighten visa restrictions on mainland Chinese wishing to visit Macau”.
Macau’s Gross Domestic Product (GDP) in real terms fell by 32.3 percent in the first quarter of 2008 to 22.2 percent in the second quarter, fundamentally due to a drop in investment, and to 11.3 percent in the third quarter due to a fall in casino revenues.
The EIU report, cited by MacauNews, said that, “casino income started to contract year on year by the fourth quarter of 2008, while the decline in investment also became more pronounced. Thus, economic growth will slow significantly in the fourth quarter of 2008, and in 2009 GDP looks set to contract.”
According to the report, “Macau remains primarily a day-trip market reliant on gambling. Recently unveiled non-gaming attractions, including sprawling retail malls, high-end dining and international concerts, have generated only weak demand.”
The EIU report concluded that, “the government is not short of funds, however, thanks to soaring gambling tax receipts, and pressure and assistance from powerful tourism and gaming interests should mean that the infrastructure bottlenecks are addressed, although Macau will probably suffer significant growing pains over the coming years” (macauhub)