Within the scope of the latest release of its World Economic Outlook, the International Monetary Fund (IMF) anticipates that the economy of the Macau Special Administrative Region (SAR) will grow by 58.9% in 2023, as Asia Gaming Brief reports. Based on this forecast, the reputable monetary institution expects that the recovery of the Macau Region’s GDP will have reached 86% of pre-pandemic levels by 2024.
Gaming Exports as Key Growth Component:
The IMF forecast took into account the fact that Macau’s Gross Domestic Product (GDP) fell by 26.8% in 2022 but also the recent economic development following the re-opening of casino resorts and other facilities as of January 8, 2023. The institution has also updated the Outlook to indicate that the SAR economy has the potential to grow by 20.6% in 2024 as well.
The report observed the 2019-2022 period when the region’s GDP lost 60% of its value and fell from $54 billion in 2019 to $22.1 billion in 2022 to indicate that the pandemic and related closures heavily affected the region’s economy. Therefore IMF reportedly specifies the export of gaming services as the key component for the economic growth of Macau and grounds its future prospects for the region on the turnover in this industry.
Expected Jobless Rate Decline:
According to the source, the IMF also predicts that the SAR unemployment rate will go down to 2.7 percent in 2023. According to data reportedly furbished by Macau’s Statistics and Census Service, the rate has already fallen from 3.4 percent in the observed period to 3.3 percent over the first quarter of this year which has been the lowest unemployment rate since Q1 2022.
COVID-related restrictions induced a 26 percent visitor decline in 2022 to the count of only 5.7 million which was reportedly the lowest level in the region since 1999 to make a huge impact on the local economy. However, the region opened in January this year and the arrival rates in the first quarter of 2023 rebounded to levels similar to those seen before the pandemic when a record 39.4 million tourists visited the SAR in 2019.
However, the IMF also considered the current economic trends to forecast the overall growth and the reduction of jobless rates in the forthcoming period. Therefore this institution proceeds with an 8.5% anticipated growth of Macau’s GDP in 2025. For China, the monetary authority expects to see a 5.2% growth of economic activities still this year which is in line with the 5% growth target set by Chinese competent authorities.
Increased Arrivals Boost Growth:
The strong recovery arising out of the increased arrivals in the city was anticipated by some forecast agencies as well. Last month, rating agency Fitch reportedly forecast that gaming revenue would recover to almost half of the 2019 level. “The removal of pandemic control measures and resumption of mainland packaged tours as well receding labor shortages and supply-side capacity constraints will materially lift the visitation numbers for 2023”, Fitch reportedly said.
Other industry experts also expect intensified recovery in the forthcoming months, based on the fact that five million tourists visited the region in the first quarter of the year which is usually considered ‘low season.’ The Macau Government Tourism Office reportedly uses the same figure to predict that the city could reach the 20 million target by the end of the year. As the increased arrivals will continuously improve Macau’s gross gaming revenue, the region’s GDP growth of 58.9% anticipated by the IMF seems more feasible as the year rolls out.