MACAU, CHINA (MERXWIRE) - Macau's economy shrank slightly in the first quarter of 2024, according to new data released in early May by the Statistics and Census Service (DSEC). The city's gross domestic product (GDP) was estimated at MOP 99.78 billion, representing a real-year decline of 1.3%. The overall size of the economy remains at just 85.2% of the level recorded during the same period in 2019, before the COVID-19 pandemic disrupted global travel and tourism.

Economic Recovery Stalls Amid Shifting Tourist Spending

Despite a steady increase in tourist arrivals, Macau's economic recovery appears to be slowing. In the first quarter, inbound visitor numbers rose by 11.1% year-on-year, marking a continued return of travelers to the region. However, this influx has not translated into stronger economic output. The DSEC attributed the slowdown to changes in consumption behavior among tourists, which led to a real-year decline of 3.8% in the export of other tourism-related services.

Macau, home to the UNESCO-listed Historic Centre, has long captivated visitors with its unique fusion of Portuguese and Chinese cultures, vibrant culinary scene, and well-preserved architecture. Though compact in size-just 33.3 square kilometers-the city is home to over 170 tourist attractions. In 1999, only 7 million tourists visited Macau. As of December 7, 2024, that number had surged to over 32.54 million, roughly 47 times the city's population.

Nevertheless, the structural dependence on a narrow set of economic drivers, particularly the gaming sector, continues to limit diversified growth. The drop in service exports beyond gaming-related activities reflects Macau's ongoing vulnerability to changes in visitor behavior and global economic conditions.

Gaming Revenue Rebounds, but Dependence Deepens

While tourism-linked services contracted, the city's gaming industry remains a dominant force in the economy. According to data published by the Gaming Inspection and Coordination Bureau on May 2, gross gaming revenue in 2024 reached MOP 226.7 billion, an increase of MOP 43.7 billion over the previous year.

Government projections for 2025 suggest further growth, with gaming revenue expected to reach MOP 240 billion-an 11% increase year-on-year. These numbers underscore the city's continued reliance on casino operations, despite repeated policy statements aimed at promoting economic diversification.

Historically, Macau's gaming revenue has far outpaced that of other global casino hubs. In December 2013 alone, monthly revenue hit MOP 33.46 billion, with full-year figures reaching MOP 360.75 billion-about seven times the revenue of Las Vegas casinos at the time. The current rebound in gaming revenue, while welcome, also reflects a return to pre-pandemic economic patterns rather than a shift toward new sectors.

Government Measures to Stabilize Economy and Support Households

In response to continued inflationary pressure and modest growth, the Macau government has implemented measures to share economic gains with the public. In April 2024, the government announced the latest phase of its annual cash handout scheme, officially known as the "Wealth Partaking Scheme."

Under this program, eligible permanent residents will receive MOP 10,000 each, while non-permanent residents will receive MOP 6,000. The initiative aims to support domestic consumption and offer some relief amid rising living costs, without jeopardizing the city's public finances.

Macau's Q1 GDP decline, though modest, highlights the fragility of its recovery path. As global tourism stabilizes, the city faces the dual challenge of revitalizing its non-gaming sectors while maintaining its competitive edge in casino tourism.