A MOP$2.2 billion stimulus initiative providing all Macau citizens with a MOP$3,000 electronic consumption voucher will do little to revitalize the local economy given its reliance on gaming and tourism revenues, a noted economic expert told Inside Asian Gaming.
Kwan Feng, assistant professor of the Department of Economics of Macau University, warned that the economic benefits of the government’s stimulus package would be limited compared with the massive business volumes generated by the city’s casinos.
However, with the gaming and tourism industries so heavily reliant on visitation from mainland China, Kwan said the recent escalation of the coronavirus pandemic globally could mean further delays before Macau’s economy can rebound.
“Most people hope we can have a strong rebound in the second half of this year, but now as the pandemic stands, we might need to wait until the end of the third quarter or even the fourth quarter to see any rebound,” he explained.
“A few weeks ago we were predicting that once the situation in mainland China was brought under control, Macau could once again welcome tourists and business would go back to normal. But now, the situation has become more complicated and unpredictable.”
Macau reported its first new case of COVID-19 in over a month last weekend when a 26-year-old non-resident worker returned from a trip to Portugal, while several recent cases in mainland China have been imported from foreign countries.
Kwan noted that the mainland government might still be reluctant to ease travel restrictions for its own citizens while tightening restrictions on arrivals from other nations.
“Macau’s annual visitor numbers (39.4 million in 2019) might drop to half of last year,” he stated. “The first half of this year is already hopeless.”
The Macau government responded to the sagging economy last month by announcing its voucher scheme as well as various tax concessions for individuals and businesses.
However, Kwan pointed out that high-end consumption sectors would see little benefit.
“The purpose of this plan is to give confidence to local SMEs rather than provide practical economic efforts on the whole economy,” he said.
“Even with the multiplier effect, MOP$2.2 billion is not great enough to revitalize Macau’s economy. The core of Macau’s economy still relies on the gaming and tourism industries.”