Macau economy reverses downward trend and grows 4.0% in third quarter of 2016

23 November 2016

Macau’s economy recorded annual growth of 4.0% in real terms in the third quarter of 2016, the first time in the last two years it has recorded quarterly growth, reported the Statistics and Census Bureau.

The growth was due to a surge in the value of exports of services and investment, in particular exports of gaming services and other tourist services increasing in annual terms by 0.2% and 6.5 %, respectively, after posting contractions of 9.9% and 6.0& in the second quarter.

The implicit GDP deflator (which measures overall inflation) recorded a marginal increase of 0.2% in annual terms in the third quarter, the Bureau said.

Private consumption grew, with an annual increase of 0.3%, ending the downward trend of the first two quarters due to the favourable outlook of the labour market and a drop in inflationary pressure.

However, spending on durable goods remained weak, reflecting the cautious behaviour of households in relation to non-essential expenses.

Final government expenditure fell by 1.3% year on year, which was lower than in the second quarter (+6.1%).

Gross fixed capital formation, or investment, registered annual growth of 2.3%, due to the favourable situation in the second quarter (-20.0%), primarily reflecting private investment, with increases of 1.3% in construction and 11.2% in investment in equipment.

In the first three quarters of 2016 Macau’s economy contracted by 5.4% in real terms, with a 1.6% decline in private consumption, 18.1% in investment, 22.0% in exports of goods, 15.4% in imports of goods, 5.8% in services exports and 1.0% in imports of services, with contractions of 8.7% in gaming exports and of 2.6% in exports of other tourist services.

In contrast, there was an increase of 1.6% in the government’s final consumption expenditure, the only major component of expenses that recorded growth.

The Bureau revised economic growth figures for 2014 and 2015, with the decreases announced (-0.9% and -20.3%) upgraded to -1.2% and -21.5%.

In relation to the review of economic growth in the first and second quarters of 2016, the respective figures improved from -13.3% and -7.1% to -12.4% and -7.0%. (macauhub)