Information from the Statistics and Census Service (DSEC) indicated that the economy of Macao in the third quarter of 2019 contracted by 4.5% year-on-year in real terms, mainly attributable to a larger decline in exports of services. External demand continued to slow, with exports of services falling by 4.7%; meanwhile, exports of goods edged up by 0.5%. Domestic demand decreased at a slower pace; gross fixed capital formation dropped by 8.5% whereas private consumption expenditure and government final consumption expenditure rose by 2.8% and 4.3% respectively. Imports of goods and services increased by 1.6% and 2.1% respectively. The implicit deflator of GDP, which measures the overall changes in prices, went up by 2.4% year-on-year in the third quarter of 2019.
Private consumption showed steady growth. Despite a relatively large drop (-12.4%) in spending of residents on durable goods, private consumption expenditure grew by 2.8%, which was in line with the growth in the previous quarter. Household final consumption expenditure in the domestic market and abroad showed respective increases of 2.5% and 3.4%.
Government final consumption expenditure maintained growth, rising by 4.3% year-on-year. Compensation of employees rose by 2.5% and net purchases of goods and services went up by 6.2%.
Investment in fixed assets recorded a slower decrease. Gross fixed capital formation dropped by 8.5% year-on-year in real terms in the third quarter, with construction investment and equipment investment falling by 9.7% and 3.0% respectively. Private construction investment declined by 26.3% owing to reduced investment in residential projects and the corresponding drop in real estate developers’ operating margin; private equipment investment, however, rose by 1.7%. On the other hand, public construction investment surged by 131.3% as a result of increased government investment, as well as a low base of comparison due to the completion of major constructions in the Macao boundary crossing area of the Hong Kong-Zhuhai-Macao Bridge in the third quarter of 2018; meanwhile, public equipment investment shrank by 19.3%.
Merchandise trade slackened. In spite of a sustained growth in private consumption, imports of goods merely increased by 1.6% year-on-year owing to the continued decrease in investment. External demand slowed down, with exports of goods rising slightly by 0.5%.
Exports of services posted accelerated decline. Overnight visitor arrivals decreased by 1.2% year-on-year under external influences while same-day visitors increased. As per-capita spending of both overnight visitors and same-day visitors registered relatively large drop, exports of other tourism services slid by 12.4%. Exports of gaming services fell by 4.2% year-on-year, dragged by a steeper decrease in VIP gaming business; meanwhile, imports of services rose by 2.1% year-on-year.
For the first three quarters of 2019, the economy of Macao shrank by 3.5% year-on-year in real terms. In terms of the major expenditure components of GDP, private consumption expenditure and government final consumption expenditure rose by 2.9% and 4.9% respectively year-on-year. Investment dropped by 22.1%. Exports of goods fell by 9.1% while imports of goods inched up by 0.3%. Exports of services slid by 1.9%, with exports of gaming services falling by 2.0%; meanwhile, imports of services went down by 10.4%.
Besides, economicgrowth for 2017 and 2018 was revised upward to 9.9%and 5.4% respectively. The rate of growth for the firstand second quarters of 2019 was revised downwardto -3.8%and -2.2%, and that for the first half year was revised down to -3.0%.