Macau’s gross domestic product (GDP) shrank by 3.2 percent year-on-year in real terms, ending the uptrend that lasted for 10 consecutive quarters, the Statistics and Census Bureau (DSEC) said Monday.
“Total demand weakened due to feeble growth, leading to increased downward pressure on the economy,” a DSEC statement said.
External demand slowed considerably, the statement pointed out. Total exports of services dropped by 0.3 percent year-on-year, with exports of gaming services and other tourism services falling by 0.6 percent and 0.3 percent respectively. Moreover, exports of goods recorded a decrease of 1.8 percent. Domestic demand remained sluggish, down by 9.4 percent year-on-year due to a significant decline in investment in fixed assets. Private consumption expenditure and government final consumption expenditure rose by 2.1 percent and 4.1 percent respectively, “offsetting part of the decrease resulting from the economic downturn,” the statement said.
Imports of goods grew by 2.0 percent, while imports of services fell by 20.9 percent. The GDP deflator, a measure of price changes, rose by 3.2 percent year-on-year, according to the statement.
Private consumption expenditure recorded smaller growth. In spite of Macau’s favourable employment situation and higher employment earnings, “consumer sentiment turned cautious on account of the uncertain economic outlook,” the statement said.
Meanwhile, private consumption expenditure rose by 2.1 percent year-on-year, down slightly from the 2.8 percent growth in the previous quarter, “in view of the high comparison base” resulting from an upsurge in sales of automobiles in the first quarter of last year after Super Typhoon Hato in August 2017, according to the statement.
Household final consumption expenditure in the domestic market and abroad showed increases of 1.3 percent and 7.9 percent respectively.
Government final consumption expenditure recorded sustained growth, up by 4.1 percent year-on-year, an improvement on the 3.4 percent rise in the previous quarter. Compensation of employees (CE) and net purchases of goods and services grew by 2.4 percent and 7.0 percent respectively.
“Investment in fixed assets declined further due to a decrease in construction projects,” the statement said.
Gross fixed capital formation (GFCF) shrank by 31.7 percent year-on-year as a result of a 37.5 percent drop in construction investment. However, equipment investment increased by 4.5 percent. Investment in public construction plunged by 82.3 percent due to the completion of the Macau border checkpoint complex of the Hong Kong-Zhuhai-Macau Bridge (HZMB), which involved a large investment by the government.
Besides, equipment investment declined by 75.6 percent. Private investment saw no improvement, falling by 15.0 percent year-on-year. Following the successive completion of large-scale construction projects and a decrease in new projects, construction investment dropped by 20.4 percent. Equipment investment, on the other hand, increased by 11.3 percent.
Total demand eased and merchandise trade showed weak performance. Growth in private consumption expenditure narrowed, investment continued to decrease and visitor spending dropped. Meanwhile, imports of goods rose by 2.0 percent year-on-year. External demand slowed down, with merchandise exports falling by 1.8 percent.
“Weak growth momentum led to mediocre performance of the services trade, the statement said. Despite a marked increase in visitor arrivals, exports of services declined by 0.3 percent year-on-year as visitor spending slowed down. Exports of gaming services and other tourism services reversed from an uptrend, dropping by 0.6 percent and 0.3 percent respectively as compared to the respective growth of 6.7 percent and 1.4 percent in the previous quarter. Besides, imports of services fell by 20.9 percent year-on-year. (Macaunews)