Macau Q3 GDP leapfrogs to positive territory

Macau Q3 GDP leapfrogs to positive territory

Macau economy snaps a two-year economic contraction, thanks to the resurgence of gaming revenue in the former Portuguese enclave.

Macau Q3 GDP leapfrogs to positive territoryRecent data from the city’s Statistics and Census Service showed that Macau’s gross domestic product (GDP) in the July to September 2016 period accelerated by four percent, the first positive quarterly growth recorded over the past two years. The last time Macau chalked a positive GDP was in the second quarter of 2014 when the when the city’s economy expanded by 5.7 percent.

DSEC have attributed the rise to a rebound in both exports of services and investment. Gaming services in Macau are included in exports when calculating the city’s GDP.

“External demand showed improvement, leading to a pickup in exports of gaming services and exports of other tourism services, rising by 0.2 percent and 6.5 percent respectively year-on-year,” noted DSEC in yesterday’s statement.

Data released by Macau casino regulator Gaming Inspection and Coordination Bureau (DICJ) last week revealed that VIP baccarat gross gaming revenue in the three months ending September 30 made up 52 percent of all the GGR generated by casino games.

DICJ reported that Macau’s mass-market segment casino GGR, which includes slot machines and live multi game electronic tables, has expanded by 3.9 percent year-on-year in the third quarter of the year. However, Union Gaming pointed out that when the operators’ reported numbers for the period are taken into account, mass market gambling has, in fact, expanded by 11 percent year-on-year.

Meanwhile, Private consumption expenditure and investment picked up by 2.3 percent while domestic demand bounced back to the positive territory with 0.3 percent.

At the same time, investment gained momentum during the third quarter, underpinned by an increase in private investment. Gross fixed capital formation, the gauge of investment, grew by 2.3 percent year-on-year, rebounding from a sharp decline of 20 percent in the previous quarter.

Government investment rose by 1.8 percent, of which equipment investment grew by 17.5 percent but public construction declined by 0.1 percent.

In real terms, Macau government said that its economy contracted by 5.4 percent in the first nine months of 2016.