Gaming sector expected to have limited impact on Macau’s economic growth in 2019/2020

23 January 2019

The gaming sector’s contribution to Macau’s economic growth in 2019/2020 will be marginal due to the fact that new casino construction is not expected, according to the Economist Intelligence Unit (EIU).

The latest EIU report on Macau forecasts a growth rate of 2.3% this year and 3.6% in 2020.

The report said that the government’s efforts to promote economic diversification, which is too focused on gaming and gambling, have been had and will remain unsuccessful in 2019/2020.

“However, casino operators will continue to invest during 2019 and 2020 in tourism that is not directly related to gambling, which will result in the expansion of the entertainment offerings,” the report said.

The report also mentioned a projected cooling of China’s economic growth in 2019/2020 adding that despite this Chinese income will continue to rise, ensuring that mainland visitors will continue to spend on gambling and entertainment in Macau.

One of the consequences of the completion of most of the new casinos, particularly in Cotai, the landfill area between the islands of Coloane and Taipa, is that gross fixed capital formation or investment will continue to fall this year, although at less than the rate of -17.1% recorded in 2018, before rising again to 5.6% in 2020.

The document noted that public works, such as a new social housing project, the hospital for the islands and the first phase of the light railway, will have a limited impact on the growth of gross social capital formation.

The inflation rate will decline slightly from 2018 to 2.8% to 2.6%, according to the EIU, while the budget balance will remain positive in double digits, albeit close to 10%, with projected rates of 11.2% in 2019 and 10.4% in 2020. (macauhub)