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Macau economy recovers to 70 percent of pre-COVID level

Academics and researchers point out that the local economy has reached levels close to 71 percent of those recorded in 2019. They also forecast that the city’s gaming revenue will reach a value close to 200 billion patacas in 2023.

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The Macau Studies Center of the University of Macau (UM) held a seminar today (30 August) on the Macau SAR Government’s policy speech for the fiscal year 2024.

During the event, experts and academics offered suggestions for the government’s policies in the next fiscal year. They also discussed residents’ expectations amid economic recovery, the post-pandemic situation of micro and small enterprises (SMEs), as well as the transformation of the occupational structure and the problem of unemployment caused by the development of artificial intelligence.

Samuel Tong Kai Chung, president of the Macau Institute of Management, said Macau’s economy is recovering and has reached 71 percent of the 2019 level.

However, the economist highlighted that as the tourism industry and tourist consumption undergo structural adjustments, the government must pay attention to the structural imbalance in the economic recovery process.

Davis Fong Ka Chio, director of the Institute for the Study of Commercial Gaming at UM, pointed out that the number of visitors to Macau has so far reached 14 million. He predicted that the mass market will return to 2019 levels in the fourth quarter of this year.

Fong highlighted that Macau’s economic recovery this year should exceed expectations, with the gaming gross profits reaching 180 to 190 billion patacas, or even exceeding 200 billion patacas in 2024.

However, Ricardo Siu Chi Sen, associate professor in the Faculty of Business Administration at UM, expressed concern about the sudden increase in the number of tourists during Macao’s recovery period. He called on the government to consider introducing measures such as encouraging the use of public transport, establishing dedicated lanes for public transport, focusing more on environmental health, and implementing smart traffic diversion measures.

Siu also added that the government should preliminarily consider using the digital yuan in the future and take legislative action on digital currency and mobile payments.

Budget problems

Davis Fong noted that as the Government will have more infrastructure and public housing projects in the coming years, public spending should also increase. The annual budget will likely be in deficit next year.

The local gaming industry generated around 96.7 billion patacas between January and July, close to the 130 billion estimated by authorities for this year. Macao SAR’s public coffers received 26.7 billion patacas in gaming taxes during the first half of the year, just over half of the 50 billion patacas expected for this year.

Fong also noted that due to the impact of high-interest rates, the liquidity of SMEs is tight. Some SMEs that participated in the public plan allowing interest payments with the suspension of capital repayment may face risks of closure or lack of liquidity in the future.

For Tong Kai Chung, the Government must observe the impact of integration in the Greater Bay Area and increased regional competition on Macau’s SMEs. The government should help them transition and survive during the course of economic restructuring.

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