Gross Domestic Product (GDP) for the 3rd Quarter 2019

Information from the Statistics and Census Service (DSEC) indicated that the economy of Macao in the third quarter of 2019 contracted by 4.5% year-on-year in real terms, mainly attributable to a larger decline in exports of services. External demand continued to slow, with exports of services falling by 4.7%; meanwhile, exports of goods edged up by 0.5%. Domestic demand decreased at a slower pace; gross fixed capital formation dropped by 8.5% whereas private consumption expenditure and government final consumption expenditure rose by 2.8% and 4.3% respectively. Imports of goods and services increased by 1.6% and 2.1% respectively. The implicit deflator of GDP, which measures the overall changes in prices, went up by 2.4% year-on-year in the third quarter of 2019.

Private consumption showed steady growth. Despite a relatively large drop (-12.4%) in spending of residents on durable goods, private consumption expenditure grew by 2.8%, which was in line with the growth in the previous quarter. Household final consumption expenditure in the domestic market and abroad showed respective increases of 2.5% and 3.4%.

Government final consumption expenditure maintained growth, rising by 4.3% year-on-year. Compensation of employees rose by 2.5% and net purchases of goods and services went up by 6.2%.

Investment in fixed assets recorded a slower decrease. Gross fixed capital formation dropped by 8.5% year-on-year in real terms in the third quarter, with construction investment and equipment investment falling by 9.7% and 3.0% respectively. Private construction investment declined by 26.3% owing to reduced investment in residential projects and the corresponding drop in real estate developers’ operating margin; private equipment investment, however, rose by 1.7%. On the other hand, public construction investment surged by 131.3% as a result of increased government investment, as well as a low base of comparison due to the completion of major constructions in the Macao boundary crossing area of the Hong Kong-Zhuhai-Macao Bridge in the third quarter of 2018; meanwhile, public equipment investment shrank by 19.3%.

Merchandise trade slackened. In spite of a sustained growth in private consumption, imports of goods merely increased by 1.6% year-on-year owing to the continued decrease in investment. External demand slowed down, with exports of goods rising slightly by 0.5%.

Exports of services posted accelerated decline. Overnight visitor arrivals decreased by 1.2% year-on-year under external influences while same-day visitors increased. As per-capita spending of both overnight visitors and same-day visitors registered relatively large drop, exports of other tourism services slid by 12.4%. Exports of gaming services fell by 4.2% year-on-year, dragged by a steeper decrease in VIP gaming business; meanwhile, imports of services rose by 2.1% year-on-year.

For the first three  quarters  of 2019, the economy of  Macao shrank by 3.5% year-on-year in real terms. In terms of the major expenditure components of GDP, private consumption expenditure and government final consumption expenditure rose by 2.9% and 4.9% respectively year-on-year. Investment dropped by 22.1%. Exports of goods fell by 9.1% while imports of goods inched up by 0.3%. Exports of services slid by 1.9%, with exports of gaming services falling by 2.0%; meanwhile, imports of services went down by 10.4%.

Besides, economic growth for 2017 and 2018 was revised upward to 9.9% and 5.4% respectively. The rate of growth for the first and second quarters of 2019 was revised downward to -3.8% and -2.2%, and that for the first half year was revised down to -3.0%.