Information from the Statistics and Census Service (DSEC) indicated that the economy of Macao expanded by 4.0% year-on-year in real terms in the third quarter of 2016, the first positive quarterly growth recorded over the past two years, attributable to a rebound in both exports of services and investment. External demand showed improvement, leading to a pickup in exports of gaming services and exports of other tourism services, rising by 0.2% and 6.5% respectively year-on-year, an upswing from the second quarter (-9.9% and -6.0%); meanwhile, exports of goods decreased by 15.6%, a slowdown from the 24.7% drop in the second quarter. Domestic demand recovered, private consumption expenditure and investment grew by 0.3% and 2.3% respectively; meanwhile, government final consumption expenditure and imports of goods fell by 1.3% and 7.3% respectively. The implicit deflator of GDP, which measures the overall changes in prices, rose marginally by 0.2% year-on-year in the third quarter. Private consumption resumed growth. Sustained favourable employment situation and reduced inflationary pressures pushed private consumption expenditure up slightly by 0.3% year-on-year, ending its downward trend in the previous two quarters; nevertheless, expenditure on durable goods remained weak, revealing that households were still relatively cautious about spending on non-essential items. Household final consumption expenditure in the domestic market and abroad grew by 0.5% and 4.5% respectively. Government final consumption expenditure diminished, falling by 1.3% year-on-year, lower than the 6.1% growth in the second quarter. Compensation of employees increased by 2.2%, while net purchases of goods and services decreased by 4.9%. Investment gained momentum. Gross fixed capital formation, the gauge of investment, grew by 2.3% year-on-year, rebounding from the second quarter (-20.0%). Investment growth was underpinned by an increase in private investment. Private investment in construction and equipment increased by 1.3% and 11.2% respectively, resulting in a 2.4% rise in total private investment. Meanwhile, government investment rose by 1.8%, of which equipment investment grew by 17.5% but public construction edged down by 0.1%. Decline in merchandise trade tapered off. Overall demand stabilized, with private consumption, investment and visitor spending showing modest growth. Both imports and exports of goods decreased at a slower rate, by 7.3% and 15.6% respectively year-on-year, far lower than the 17.0% and 24.7% declines in the second quarter. Service trade returned to positive growth. Owing to increases in visitor arrivals and spending, exports of services grew by 3.3% year-on-year, putting an end to the downtrend over the past two years. Exports of gaming services and exports of other tourism services increased by 0.2% and 6.5% respectively. Meanwhile, imports of services rose by 6.2% year-on-year, improving from the 3.1% drop in the second quarter. In the first three quarters of 2016, the economy of Macao contracted by 5.4% in real terms. In terms of major GDP expenditure components, private consumption expenditure decreased by 1.6%, investment receded by 18.1%, exports and imports of goods dropped by 22.0% and 15.4% respectively; exports and imports of services shrank by 5.8% and 1.0% respectively, in which exports of gaming services and exports of other tourism services fell by 8.7% and 2.6% respectively; meanwhile, government final consumption expenditure rose by 1.6%, the only major expenditure component that registered growth. Economic growth for 2014 and 2015 was revised downwards from 0.9% and -20.3% to -1.2% and -21.5% respectively, while the rate of growth for the first and second quarters of 2016 was revised upwards from -13.3% and -7.1% to -12.4% and -7.0% respectively.
