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Researchers warn of ‘many challenges’ on the road to economic recovery

Economists at the University of Macau say improvements in the territory’s economy will ‘be more obvious’ this year, but hurdles remain.

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Economists at the University of Macau say improvements in the territory’s economy will ‘be more obvious’ this year, but hurdles remain.

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PUBLISHED

UPDATED: 21 Dec 2023, 11:30 pm

Macao’s gross domestic product (GDP) is expected to grow between 20.5 percent and 44.1 percent in 2023, according to the Macroeconomic Forecast for Macao 2023 report issued by the University of Macau (UM) Centre for Macau Studies and Department of Economics.

However, the projection must be set against a 54.2 percent contraction in 2020, a 19.3 percent rebound in 2021, followed by a  26.8 percent contraction in 2022, brought about by the effects of the Covid-19 pandemic.

The report’s authors say that GDP this year could stand somewhere between 211.8 billion patacas and – in the most optimistic scenario – 253.3 billion patacas. By comparison, GDP in 2019, the last year before the pandemic, stood at 434.6 billion patacas.

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While researchers believe that tourism – the cornerstone of Macao’s economy – will continue to recover, at best they project visitor arrivals in the third quarter and the fourth quarter at 6.94 million (70 percent of 2019’s level), and 7.36 million (80 percent of 2019’s level), respectively. In the worst-case scenario, arrivals could languish at 30 percent to 35 percent of pre-pandemic figures for the second half of the year.

The report also drew attention to “the willingness of foreigners to visit Macao,” which the local government is anxious to encourage in order to reduce the territory’s dependence on domestic tourism. According to official statistics, of the 9,436,215 visitors recorded from January to May, 96.2 percent came from mainland China, Hong Kong or Taiwan, leaving just 3.8 percent from other places – well short of pre-pandemic levels.

Researchers said that while “Macao’s economic recovery (especially in the second half of the year) will be more obvious this year,” there would still “be many challenges on the road to economic recovery.” In particular,  the ongoing labour shortage “will hinder the growth of tourism-related industries.”

 

UPDATED: 21 Dec 2023, 11:30 pm

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