The Macau Government estimates that the local economy will fall by 60.9 per cent in 2020, due to the impact of the pandemic, according to the 2021 government policy address presented today (Monday) by Chief Executive Ho Iat Seng.
The figures released are higher than those presented about a month ago by the International Monetary Fund (IMF), which had predicted a 52.3 per cent Gross Domestic Product (GDP) decline this year.
Even so, with the reopening of individual tourist visas from mainland China to the SAR on September 23, suspended since the beginning of the pandemic, a timid recovery has already begun with a relative increase in tourists.
If the “pandemic situation in Macau and neighbouring regions remains controlled and improved, GDP may reach double-digit annual growth” in 2021, the authorities believe, according to the document released today.
In his speech before the legislators, Ho Iat Seng underlined that “the forecast for the next year appears to be positive”.
“The economy is expected to gradually recover its growth. As soon as the gaming and tourism sectors recover their growth, and with the further development of new industries, the employment situation and product prices will stabilize ”.
The government leader said he foresaw that the pace of economic recovery will remain slow “causing most sectors and small and medium-sized enterprises to continue to experience economic difficulties”.
Especially because, Ho Iat Seng said, “border control of entry and exit, carried out by other visitor markets and Mainland China, remains rigorous, which constitutes an obstacle to the rapid economic recovery of Macau. The increase in the number of visitors is also a risk factor, in epidemiological terms, with the possibility of the pandemic situation to fluctuate still being large”.
Macau was one of the first territories to be hit by the economic crisis due to the pandemic.
The SAR registered the first case on January 22 and since then adopted several health measures to control the spread of the virus, such as the closure of casinos for 15 days, a plan to distribute masks and strong border control.
The sanitary measures proved to be effective, since the territory only registered 46 cases of the disease and since June 26 that no case has been detected, but have practically paralyzed the economy, almost exclusively dependent on the casino industry and Chinese tourism.
Today, Ho Iat Seng once again affirmed that the good results of the casinos are decisive for Macau, however the objective must pass by “abandoning the path that has been followed, of excessive dependence on gambling and promoting effective diversification and sustainable development of the economy ”
The uncertainties in the territory are still many, with the gaming operators in the territory presenting hundreds of millions of euros in losses in the third quarter of this year.
Macau casinos had closed 2019 with revenues of MOP292.4 billion (US$36.6 billion).
The Macau Government collected only MOP24.34 billion until October in direct taxes on gambling, a drop of almost MOP70 billion, in an annual comparison.
A year ago, in October, Macau had revenues of MOP 94.03 billion.
For 2021, the Government expects to raise MOP45.5 billion and, despite an improvement, is still a long way from the MOP112.71 billion collected in 2019.