Researchers at the University of Macau (UM) Centre for Macao Studies (CMS) and the Department of Economics have predicted that the economy will grow between 20 and 44 per cent this year.
The 2023 Macroeconomic Forecast also estimated that exports of services will grow by up to 83 per cent, and the final government revenue will be around MOP 60 billion. Macao’s economic recovery is also expected to be more pronounced, especially in the second half of the year.
Based on differing scenarios, the research team made the following forecasts:
– The Gross Domestic Product (GDP) growth forecast ranges between 20.5 per cent, to MOP 211.8 billion (47.7 per cent of 2019’s level) and 44.1 per cent, to MOP 253.3 billion (67 per cent of 2019’s level).
– The exports of services’ growth forecast ranges between 35.2 per cent and 82.8 per cent.
– The government’s current revenue in 2023 is expected to remain around MOP 55.4 billion and MOP 66.1 billion.
In 2022, the economy of Macao continued to shrink as a result of the impact of the pandemic and epidemic prevention policies, researchers noted. In the first quarter, the year-on-year GDP fell by 10.5 per cent. Following the relatively large-scale emergence of infection cases in the local community last summer, the year-on-year GDP collapsed by 39 per cent in the second quarter, returning to the level of the second quarter of 2020. From mid-June to July 2022, subject to the influence of the implementation of lockdown measures, the year-on-year GDP decreased by 33.4 per cent in the third quarter.
Since Macao adjusted its Covid-19 prevention policies in December 2022, visitor arrivals are expected to increase in 2023. However, there are differences in the adaptability of Macao society and the willingness of foreigners to visit Macao, the UM team said. In response to these differences, the research team has predicted three possible scenarios.
- Visitor arrivals are assumed to be 2.07 million in the first quarter (20 per cent of 2019’s level), 2.48 million in the second quarter (25 per cent of 2019’s level), 2.98 million in the third quarter (30 per cent of 2019), and 3.22 million in the fourth quarter (35 per cent of 2019’s level).
- More optimistically, visitor arrivals are assumed to be 3.11 million in the first quarter (30 per cent of 2019’s level), 3.97 million in the second quarter (40 per cent of 2019’s level), 4.96 million in the third quarter (50 per cent of 2019’s level), and 5.52 million in the fourth quarter (60 per cent of 2019’s level).
- The best-case scenario envisages that visitor arrivals in the second half of 2023 will grow faster: arrivals in the first and second quarters are assumed to be the same as in the second scenario, while arrivals in the third and fourth quarters are assumed to be 6.94 million (70 per cent of 2019’s level), and 7.36 million (80 per cent of 2019’s level), respectively.
All three scenarios assume that there will be no major changes in the epidemic situation that will lead to rapid policy adjustment.
The researchers commented: “Macao has finally reopened after nearly three years of implementation of epidemic prevention and control measures. However, there will still be many challenges on the road to economic recovery.
“The labour market is likely to be affected by the lag effects of the pandemic in the short term and they will hinder the growth of tourism-related industries. In general, due to the low base effect in 2022, it is expected that Macao’s economic recovery, especially from July onwards, will become more obvious this year.