Macau’s economy is expected to post average growth of 4.9% in 2018/2019, by 5.8% this year and 3.9% in 2019, according to the latest report from the Economist Intelligence Unit (EIU).
Growth, though slowing down, will continue to be driven by the performance of the gaming industry, as government efforts to diversify the economy are expected to remain largely unsuccessful.
Public spending on the construction of transport infrastructure and social housing will support the progress of the investment indicator, given that large hotels and casinos built by gaming companies have already been completed or will be completed by 2019.
“We expect an additional contraction in gross fixed capital formation in 2018 as the construction of new facilities is completed, representing the third consecutive year of reduction,” the report said.
The investment will be supported by public projects such as New Urbanisation Zone A social housing, the medical complex of the islands and phase one of the Macau light rail network.
Average income in China will continue to rise, according to the EIU analysts, which will lead to mainland tourists visiting Macau to spend more on gambling and entertainment as well as consumption.
The report notes that casino operators will continue to invest heavily in tourism offerings not directly related to gambling in the period under review, thereby increasing the type of entertainment services available.
Some of the major indicators of Macau’s economy, such as inflation, the budget balance and the unemployment rate, are expected to remain unchanged over the two years under review, according to the Economist Intelligence Unit.
Macau’s Statistics and Census Bureau recently announced that the economy of the territory had posted a year-on-year increase of 5.6% in real terms in the first three quarters of 2018. (macauhub)