IMF downgrades Macau’s expected economic growth for 2021

The International Monetary Fund (IMF) has downgraded its predictions for economic growth to be reported by the Macau SAR in 2021, to a 20.4 per cent rise in its real gross domestic product (GDP).

The international entity had predicted back in April that the SAR could maybe report a 61 per cent growth this year but has now decreased its predictions by almost 40 percentage points.

The IMF also expects the city to end 2021 with a 0.3 per cent consumer price deflation, the first time such was reported at least since 2013.

Macau ended 2020 with a 56 per cent real GDP drop, as the pandemic outbreak first seriously disrupted the SAR’s economy.

The new projections seem to already take into account the recent pandemic disruption reported in the SAR between August, September and October, and that has again disrupted the local tourism and gaming industry.

The first round of citywide testing was carried out in the city after a family cluster was reported in the beginning of August.

Then again, since September 25, Macau has detected 12 local Covid-19 cases in two batches, leading two rounds of COVID-testing covering all residents from September 25 to September 28, and then from October 4 to October 7.

The new outbreak also led Zhuhai authorities to announce 14-day quarantine measures for any entries via the SAR, with visitation between the Golden Week holiday period between October 1-7 averaged only 1,200 arrivals per day.

Local authorities have estimated 2021 could end with some MOP130 million in gross gaming revenues, however as of August that tally stands at MOP67.7 billion despite a considerable improvement in monthly results from last year, the first impacted by the Covid-19 pandemic.

The Macau SAR has collected a total of MOP22.2 billion in gaming tax revenue in the first seven months of this year, only 44 per cent of the estimated MOP50 billion figure for this period.

After a MOP9.1 billion amendment to the 2021 Macau SAR budget, local authorities predict the year will end with MOP104.1 billion in public revenue and MOP103.5 billion in expenses.

As for 2022 and 2023, the IMF is currently projecting the SAR will see a 37.6 per cent and a 3.1 per cent growth, respectively.

Previously Fitch Ratings projected the local economy would rebound by 53 per cent in 2021, with the Monetary Authority of Macau (AMCM) only betting on a double-digit rebound.