Macau Economy Returns to Growth After Nine Bad Months

The Las Vegas of the East, Macau relies heavily on the revenue generated by the gambling industry. Land-based casinos act as a magnet for highrollers from all over the world who spend their money at roulette, blackjack and especially at baccarat tables. Two years ago, its economy entered a period of contraction that only ended this month. The good news was broke by the Statistics and Census Service which highlighted the fact that the city’s gross domestic product grew by 4% in Q3.

Investment and Exports Boost the Economy

The gambling industry continued to thrive in Macau, yet it didn’t grow fast enough to propel the entire economy forward. Private investment was the main catalyst for growth, although government spending also rose by 1.8%. The increase in both investments and exports of services in conjunction with a rebound in gambling revenue led to this unexpected rise. Even though the numbers are still far from impressive, they made it possible for the local economy to set an important milestone.

Macau’s mass-market segment casino GGR followed the same upward trajectory and expanded by nearly 4% in the third quarter of 2016. In terms of gambling revenue, baccarat has always been one of the most popular and profitable games in the city. VIP baccarat gross gaming revenue represented more than half of all the GGR generated in Macau casinos. This highlights the importance of this game in land-based casinos, and the significant contribution of highrollers.

Tourism also represents an important source of income and one still on the rise, although many of those who visit the city do so mostly for gambling purposes. The numbers are positive and authorities hope that economic growth will continue in the fourth quarter of 2016. Overall, this was a rather bad year for Macau, whose economy shrunk by 5.4% from January to September.