According to Moody’s Investors Service, Macau’s economy could recover to pre-Covid-19 levels by 2024.
The SAR’s economy has been severely impacted by the Covid-19 pandemic. Still, analysts say Macau’s strong sovereign finances and fiscal reserves will allow it to deploy them to help the population.
According to Moody’s, “Macao’s economy’s growth volatility is among the highest of all rated sovereigns. Moody’s does not anticipate material results in the near term. Nonetheless, despite the highly volatile nature of economic growth, Macao’s vast fiscal and external reserves, as well as its extremely high per capita income, continue to support its credit profile.
Moody’s added Macao’s GDP growth is closely related to China’s recovery, including a vaccination drive on the mainland. It would allow for a relaxation of travel restrictions. Therefore, a slowed growth recovery or a new Covid-19 wave in China would delay economic recovery in Macao. Policy measures in China that reduce Chinese demand for Macao’s gaming and tourism would also have a significant negative impact on the SAR’s economy, as evidenced between 2014 and 2016.”
“A full recovery in tourist arrivals, and thus gaming revenues, will not occur until early 2023.”