The\nCentre for Macau Studies and the Department of Economics of the University of\nMacau (UM) have released the Macroeconomic Forecast for Macao 2024, according\nto which Macao\u2019s economic growth in 2024 will be between 8.3% and 21.0%, growth\nin exports of services will be between 10.3% and 26.7%, and the final revenue\nof the Macao SAR Government will remain between approximately MOP 95.3 billion\nand MOP 109.6 billion.<\/p>
Based\non the fact that visitors from mainland China are still the main factor\naffecting the development of Macao\u2019s economy, and based on the assumption that\nthere is no major public health impact on Macao\u2019s normal social operations, the\nresearch team considered two possibilities for mainland visitor arrivals: in Scenario\n1, which is more optimistic, the mainland visitor arrivals in 2024 will return\nto the level of 2019; in Scenario 2, which is more conservative, the mainland visitor\narrivals in 2024 will increase by 5% over 2023. Based on these two scenarios,\nthe research team has made the following forecasts: 1) the baseline forecasts for\nGross Domestic Product (GDP) growth are 21.0%, reaching MOP 422.2 billion\n(96.1% of 2019) (in Scenario 1), and 8.3%, reaching MOP 377.6 billion (85.9% of\n2019) (in Scenario 2) respectively (the year-on-year growth rates are expressed\nin absolute\nvalues calculated using the chain volume measures for the year 2021); 2) the baseline forecasts for\nservices export growth are 26.7% (Scenario 1) and 10.3% (Scenario 2)\nrespectively; 3) the overall unemployment rate is projected to be 1.9%\n(Scenario 1) and 2.1% (Scenario 2) respectively; 4) the unemployment rate of residents\nis projected to be 2.6% (Scenario 1) and 2.8% (Scenario 2) respectively; and 5)\nthe Macao SAR Government\u2019s recurring revenue is projected to be MOP\n109.6 billion (Scenario 1) and MOP 95.3 billion (Scenario 2) respectively.<\/p>
Macao\nchanged its anti-epidemic policy in December 2022 after nearly three years of epidemic\nprevention and control. Visitor arrivals began to recover in 2023, with Hong\nKong visitor arrivals recovering faster, reaching 5.95 million between January and\nOctober 2023, which was 97.1% of the same period in 2019. Mainland visitor\narrivals reached 15.32 million between January and October 2023, representing 64.4%\nof the same period in 2019. However, the recovery of visitor arrivals from other\nregions was slower, with 1.42 million arrivals between January and October 2023,\nonly 40.7% of the same period in 2019. On the back of tourism recovery, the exports\nof services reached MOP 200.9 billion in the first three quarters of 2023, representing\n79.6% of the same period in 2019. However, the exports of gaming services recovered\nmore slowly, and were only MOP 101.1 billion in the first three quarters of\n2023, representing 56.1% of the same period in 2019. For domestic demand, both\nprivate consumption and investment have recovered well. The private consumption\nexpenditure was MOP 81.8 billion in the first three quarters of 2023, which was\n98.2% of the same period in 2019, while the gross fixed capital formation was\nMOP 35.8 billion in the first three quarters of 2023, which was 79.6% of the same\nperiod in 2019. Consumer prices remained stable, with the consumer price\ninflation rate between January and October 2023 at just 0.9%. The labour market\nis gradually recovering. While the overall unemployment rate in the third\nquarter of 2023 was 2.4%, the unemployment rate among local residents was 3.1%.\nAlthough these two rates were still higher compared to the figures of 1.8% and\n2.5% recorded in the third quarter of 2019, they were significantly lower than\nthe peaks of 4.0% and 5.2% recorded in the third quarter of 2022. Employment\nearnings have recovered quickly, with a median monthly employment earnings of MOP\n18,000 in the third quarter of 2023, which has surpassed the level of MOP\n17,000 recorded in the same period in 2019.<\/p>
According\nto the October 2023 forecast by the International Monetary Fund, global economic\ngrowth will slow from 3.5% in 2022 to 3.0% in 2023 and to 2.9% in 2024. As\npolicy tightening begins to have a negative impact, advanced economies are\nexpected to slow from 2.6% in 2022 to 1.5% in 2023 and to 1.4% in 2024.\nEmerging market and developing economies are projected to have a modest decline\nin growth, from 4.1% in 2022 to 4.0% in both 2023 and 2024.<\/p>
The\nresearch team expects that Macao will face uncertainties about the economic\ndevelopment in mainland China in 2024: the contraction of the real estate\nmarket, as well as local government and corporate debt will affect residents\u2019\nincome, leading to a decrease in their interest and purchasing power in travelling\nto Macao. Therefore, the research team formulated two scenarios: Scenario 1\nassumes that the slowdown in mainland China\u2019s economic growth will have less\nimpact on Macao\u2014mainland visitor arrivals will continue to grow at a higher\nrate and returns to the level of 2019 by 2024. Scenario 2 assumes that the\nslowdown in mainland China\u2019s economic growth will have a greater impact on\nMacao\u2014 mainland visitor arrivals in 2024 will have a very small growth, only 5%\ncompared to 2023.<\/p>
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Based on the above two scenarios, the forecasts of major economic\nvariables are as follows:<\/p>
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\u00b7 \nThe baseline forecasts for GDP growth are 21.0% to MOP 422.2\nbillion (96.1% of 2019 level) (Scenario 1), and 8.3% to MOP 377.6 billion (85.9%\nof 2019 level) (Scenario 2) respectively.<\/p>
\u00b7 \nThe baseline forecasts for growth in the exports\nof services are 26.7% (Scenario 1), and 10.3% (Scenario 2) respectively.<\/p>
\u00b7 \nThe baseline forecasts for growth in private\nconsumption expenditure are 5.3% (Scenario 1), and 5.0% (Scenario 2)\nrespectively.<\/p>
\u00b7 \nThe baseline forecasts for growth in gross fixed\ncapital formation are 11.2% (Scenario 1), and 7.2% (Scenario 2) respectively.<\/p>
\u00b7 \nThe inflation rate (measured by GDP deflator) is\nprojected to rise by 3.3% (Scenario 1), and 2.4% (Scenario 2) respectively; and consumer price index is projected\nto increase by 1.5%.<\/p>
\u00b7 \nMedian monthly employment earnings are projected\nto increase by 5.6% (Scenario 1), and\n4.9% (Scenario 2) respectively.<\/p>
\u00b7 \nUnemployment rate is projected to be 1.9%\n(Scenario 1), and 2.1% (Scenario 2) respectively. The unemployment rate among local\nresidents is projected to be 2.6% (Scenario 1), and 2.8% (Scenario 2) respectively.<\/p>
\u00b7 \nThe Macao SAR Government\u2019s recurring revenue is projected\nto be MOP 109.6 billion (Scenario 1), and MOP 95.3 billion (Scenario 2) respectively.<\/p>
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In order to timely analyse\nand assess the changes in Macao\u2019s macro economy, starting from 2024, the\nresearch team will try to publish forecasts on a quarterly basis.<\/p>
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About the\nMacroeconometric Structural Model of Macao<\/b><\/p>
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n<\/p>
The Macroeconometric Structural Model of Macao is a\nquarterly simultaneous-equation econometric model which covers seven blocks of\nMacao\u2019s economy: consumption, investment, external sector, prices, government,\nlabour market, and monetary sector. It includes 88 equations and 306 variables.\nTime series data start from the first quarter of 1998 and is updated once new\ndata are available. Its results provide the community with a timely\nunderstanding of the state of Macao\u2019s economy and support prudent\ndecision-making. The model was founded by the late Prof Sir James Mirrlees,\nNobel laureate in Economic Sciences and honorary doctor of social sciences of\nthe University of Macau (UM), as well as faculty members in the Department of\nEconomics of UM. Members of the research team include Chan Chi Shing, Ho Wai\nHong, and Kwan Fung. The project is now managed by the Centre for Macau Studies\nof UM.<\/p>