OPINION – Recovery focus

The worst time for casino revenues (and almost everything else) was between April and September last year. In those seven months, taken together, total gambling revenues were on par with what has been roughly the monthly record this year.

May gambling figures went up a few notches, and for the first time since the beginning of last year, they stood up above the MOP10 billion mark. 

That figure is noticeable progress and brings hope that the recovery is taking hold. But that cannot be taken for granted, and the figure is just about half the January 2020 value, just before the crisis struck, and 40 per cent the equivalent number for 2019. 

The recovery, but also its frailty, was evident in the GDP data for the first quarter. Figures for gambling, a leading gauge for the economy’s performance, are steading, and that brings further hope. But several concerns persist. Gambling revenues for the last three full calendar months – March to April – were much better than before but not yet good enough for comfort. 

The public budget execution figures also highlight the comparative weakness of the current status of the economy. The ongoing recovery notwithstanding, the public revenue is still trailing the figures for last year, when the crisis was already well installed.

The main source of government income, revenue from the gambling concessions, is lagging. Although we can expect the situation to improve in the coming months, that suggests a slow recovery and raises further questions about the economy’s resilience.

All this may, in part, explain the stress put into controlling or even reducing public expenditure. Although the concern is understandable, its manifestation under the current circumstances may negatively impact the business and social environment. 

First, the overall status of public finances is not such that it justifies serious alarm. The region’s total financial reserve in March was still only marginally below its peak value ever. It would allow, in rough terms, the government to keep current levels of expenditure for six years or so without collecting a single pataca of additional tax revenue.

Secondly, financial reserves exist not to be preserved for their own sake but to be used when the need arises. And while the good use of public money should be a permanent concern, reducing public expenditure seems hardly the central issue in the current times and may add unnecessary gloom to already challenging times.