Macao’s economic prosperity index is expected to remain stable over the next three months, hitting 6.2 points in May then 5.9 points in June and July. That’s according to a report published yesterday by the Macau Economic Association (MEA).
The prosperity index is scored out of 10 and is determined through 13 indicators such as gambling revenue, the confidence index of Chinese consumers and Macao’s visitor arrival rate.
MEA data shows that the May to July forecasts are consistent with the index’s level performance over the past year. The index hit a stable 5.8 points in March and April. According to MEA, this result shows that there is a certain level of short-term resilience in Macao’s economy.
However, the organisation is quick to point out that the city needs to be wary of a number of short and medium-term headwinds. These include weakening global demand, insufficient momentum for global growth, the tightening of financial conditions, as well as geopolitical and trade-related tensions.
As a measure of the uncertainty, the association reported that residents’ loan-to-deposit ratio fell from 62.4 percent at the end of 2022 to 51.1 percent this March. “The drop in the desire of residents and businesses to take out loans reflects their cautious attitude towards the current environment and the outlook for the economy,” the MEA wrote.
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In light of the economic hazards facing Macao, the MEA suggested that the city should continue making structural adjustments and boost its capacity to innovate, in order to smooth its long-term development.
Performance of individual indicators meanwhile continues to be uneven. For instance, the confidence index of Chinese consumers and the share prices of Macao’s six casino operators remain weak, while other determinants such as the visitor arrival rate, hotel guest numbers and occupancy rate maintained their solid performance.
In terms of money supply, the MEA reported that the indicator continued to perform strongly, breaking the 810 billion patacas mark for the first time in March, up by 8.8 percent year-on-year. Meanwhile, the daily gross gaming revenue in March and April remained stable, reaching 634 million patacas and 629 million patacas.
To more accurately reflect the state of Macao’s economy, the MEA stated that starting from this month, the prosperity index would include two new indicators – the loan-to-deposit ratio among residents and the residential property price index.
The organisation added that the performance of these two new categories has been relatively weak over the past three years, and is of the “less than optimal” level.
