OPINION – Future reference

Our statistical department publishes the Gross Domestic Product estimates based on the production data in the last days of every year. For those less familiar with these issues, and without getting into too technical details, a couple of notes is possibly appropriate here. 

There are different ways or approaches to measuring GDP. Quarterly estimates are usually based on information gathered about the expenditures made by the various economic agents. The method allows the making of estimates more speedily but often requires subsequent adjustments and corrections. Timely information trumps precision, we could say.

The results recently published use the production data obtained from the companies and other producers of goods and services, based on their annual activity and financial reports. We get, one can say, more reliable results but at a ‘price,’ that is, with a significant time delay. It has less interest as a short-term input for policy and business decisions but, among other advantages, provides better information about the structural evolution of the economy. 

Further, it is the base to calculate national income by adding to GDP the region’s net income transfers (the balance between the income earned in Macau by nonresidents and the income earned by residents elsewhere). The results that are just out concern, then, the year 2019.

It will be seen as the last year before the big crisis changed almost everything, the base year for future comparisons and analyses. A few features are worth mentioning and kept for future reference. 

In 2019 the economy seemed to be reaching a relatively stable plateau after the shock 2014 and the subsequent recovery. In 2017-2019, GDP was roughly about 650 billion patacas (in real terms, at 2018 prices). A small contraction in 2019 was not out of what one might regard as normal oscillations in an otherwise stabilizing economy. On the income side, the trends in that period were comparable, with the resident’s average income hovering a bit below MOP600,000 (2018 prices).

Structurally, the economy seemed also to be consolidating. On basic prices (that is, leaving taxes and subsidies aside), the gambling sector was about one-third of the economy for the fifth year in a row.

That stability was no more in 2020, as we all know too well. After the pandemic crisis is overcome, returning to a similar standard will be an achievement unlikely to come fast or easy. Savings, labour pools, travel, and trade flows, to name just a few, have been severely disrupted.