OPINION – Lagging

Many (and mostly external) factors influence the health of Macau’s economy. So, sound forecasts are hard to come by. In the last two years, that intrinsic uncertainty source was amplified by the pandemic dynamics, and the effects of the policies followed in its containment. Times like these we are living through make all prediction attempts even trickier. 

The year 2021 is now over. The coming couple of months will bring a significant amount of data to help us figure out the economy’s actual performance compared to what was hoped one year ago. As the first full-year figures start coming out – namely those for the all-important gambling sector – it is time to make some preliminary comments.

Everybody knows how bad 2020 was and how expectations ran high for 2021. Indeed, to make forecasts about 2021 in late 2020 was a task especially fraught with uncertainties for public and private agents alike. One of the most awaited indicators about the economy’s future direction was the amount of concession revenues inscribed in the Budget. Indeed, the government must always carry out some type of prognosis, if nothing else, to set tax collection expectations. 

In 2021 one could infer, in rough terms, that the best government estimates were putting casinos’ revenues somewhere around 125 to 130 billion patacas. However, the actual numbers came noticeably short. The year’s final figure was a tad below 87 billion patacas, that is, almost one-third less than anticipated, with a similar loss in public revenue. 

Full-year results were only marginally better than those recorded in 2020 and significantly worse than the previous years. Such an outcome will inevitably cause a sense of disappointment. The budgeted value for the current year is set at a similar level. In a way, if it is achieved, it will mean that the recovery, however modest, will arrive one year late, so to speak.  

In 2021, one underlying budgeting assumption was that connections to Hong Kong would start to normalize by the end of the first semester, as was already the case of China in some measure. That seems as far away now as in any time before. Several promised openings have been systematically derailed at the first sign of rising the number of infected, however small. Without changes on current containment policies in our primary sources of visitors and gamblers, expectations are inevitably guarded.