(Bloomberg) --
Macau's economy posted a deep contraction in the first quarter as lockdown measures introduced to contain the virus outbreak hit revenue from gambling, hotels and tourism.
- Gross domestic product in Macau plummeted 48.7% in the first three months of 2020, according to the city's statistics department. That is the fifth straight quarterly decline in the city's economic output.
- Visitor arrivals to the city plunged 68.9% in the quarter from a year earlier.
Key Insights
- Macau's economy depends heavily on the city's casinos, whose revenue was badly damaged by a 15-day lockdown and tourism restrictions to stop the spread of the coronavirus. The city is still limiting visitors from the mainland due to fears of another outbreak, and visits and gaming revenue have plunged as a result.
- Travel restrictions in or out of Macau will be lifted by early June, while the individual traveler visa scheme will restart soon after, according to Vitaly Umansky, senior analyst at Sanford C. Bernstein in Hong Kong. However, the outlook for the city's economy is still bleak, with the slowing Chinese economy likely cutting into people's desire or ability to gamble.
- “Once global lockdowns are lifted, the worst may be over for the tourism-related sectors in Hong Kong as well as Macau,” Overseas-Chinese Banking Corp economists including Tommy Xie wrote in a note. “That said, neither of the two cities will be able to see a strong recovery in its tourism activities amid concerns about second wave of infections.”
©2020 Bloomberg L.P.
With assistance from Bloomberg
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