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Macau’s GDP contracts 13.3% at start of 2016

By FT, 2016-06-03

 

Place your bets: could Macau finally be on an – albeit long – path towards economic growth?

Momentum for China’s beleaguered gambling hub is certainly improving, at least compared to the record contraction of -26.4 per cent in the second quarter of 2015.

In the first three months of this year gross domestic product fell 13.3 per cent year on year, according to Macau’s Statistics and Census Service.

The latest reading marked the seventh straight quarter of contraction, but was an improvement from the December quarter’s fall of -14.4 per cent but still well below a return to growth. For the whole of 2015 GDP shrank 20.3 per cent.

The statistics office had reported earlier that total spending by visitors to the territory in the first quarter was down 13.6 per cent year on year to MOP13.36bn (US$1.67bn), with per capita spending by visitors from mainland China down 18.1 per cent to MOP1,762 for the period.

Gaming revenues were also down 13.3 per cent year on year in the first quarter, according to calculations based on official figures. But in recent months revenues have mounted an uneven attempt at recovery, with casino revenues falling only 9.5 per cent in April year on year.

However, last week ratings agency Moody’s downgraded Macau’s sovereign debt rating on concerns about its weakening economy, saying growth “remained highly volatile”.

While Macau’s revenues have suffered extensively since the launch of mainland China’s anti-corruption campaign and ongoing slowdown, its credit rating outlook had not previously been affected. The agency cited concerns about the government’s capacity for policy response to falling gaming revenue, in addition to falling fiscal and current account surpluses, as grounds for the downgrade.

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