The financial rating agency Fitch predicted today that Macau’s economy will recover 48% this year, with casino volume reaching half the pre-pandemic level, thanks to the end of the ‘zero covid’ policy.
According to official data, Macau’s Gross Domestic Product (GDP) contracted by 26.8% in 2022, mainly due to a drop of 51.4%, to 42.2 billion patacas (4.86 billion euros ) in game revenues, the Chinese region’s dominant industry.
In a statement, Fitch said it believed that gaming revenues would “recover to about half the level of 2019”, the year in which they reached 292.5 billion patacas (33.7 billion euros).
In the first two months of this year, casino revenues in Macau reached 21.9 billion patacas (2.54 billion euros), 55.3% more than in the same period of 2022, and the best start of the last three years.
Fitch analysts today pointed to the lifting of pandemic control restrictions in mid-December and the resumption of organized tours from mainland China on March 6.
The agency said that the number of visitors should “increase significantly” this year, also thanks to the reduction of “obstacles to the capacity” to receive tourists and to alleviate the “shortage of labor”.
Since the beginning of the pandemic and until the end of January, Macau has lost almost 44,700 workers without resident status (11.3% of the active population), according to official data.
The hotel and restaurant sector has been hardest hit, having lost more than 17,600 non-resident employees since December 2019.
The Secretary for Economy and Finance of Macau, Lei Wai Nong, acknowledged on February 3 that local hotels have been experiencing a lack of staff and assured that he would negotiate with companies linked to tourism to “solve the problem the sector is facing. to come across”.
Despite the economic recovery, Fitch predicted today that the territory will continue to present a budget deficit, for the fourth consecutive year, which is expected to fall from 35.5% of GDP in 2022 to 10.5% this year.
Even so, the agency maintained the ‘rating’ of Macau at ‘AA’, the third highest level, noting that it is the only jurisdiction without any external debt and that it has a financial reserve worth 559.2 billion patacas (65 billion euros).
Fitch also said that the diversification of Macau’s economy beyond casinos “will remain slow” this year, due to “manpower limitations and skill gaps”.
The authorities of the Chinese special administrative region have pointed to economic relations with Portuguese-speaking countries as one of the priorities to reduce dependence on casinos.
*With Lusa
