Macau fell into a technical recession following two consecutive quarters of contraction in its economy, based on the evolution of Gross Domestic Product, with declines of 1.8% in the second quarter and 3.2% in the first, according to the region’s Statistics and Census Bureau.
However, the Bureau noted that the fall in Gross Domestic Product in the second quarter was lower than in the first quarter.
The contraction in the second quarter was mainly due to “the annual decline in gross fixed capital formation, or investment, due to the reduction in the number of building works.”
External demand continued to slow, with a decrease of 0.8% in gaming services exports, exports of goods fell 24.4% and domestic demand declined 6.1% year-on-year, dragged by the sharp 25% drop in gross fixed capital formation, mainly due to the 30.1% annual decrease in construction investment, although equipment investment grew 9.1%.
Private consumption expenditure and government final consumption expenditure rose respectively by 2.2% and 5.7%, offsetting part of the economic downturn.
The implicit GDP deflator, which measures the overall price changes, grew 2.4% annually in the second quarter of the year.
In the quarter under review, public sector investment in construction contracted by 51.6% year-on-year, as a result of the relatively high comparison basis due to the huge investment launched by the Government in the same period last year in Macau on the Hong Kong-Zhuhai-Macau Bridge Artificial Border Island.
Macau’s economy contracted by 2.5% year-on-year in real terms in the first half of 2019, with a 28.8% drop in gross fixed capital formation, or investment, and 12.5% in exports of goods, said the Statistics and Census Bureau. (Macauhub)