MACAO ECONOMIC BULLETIN

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MACAO ECONOMIC BULLETIN

This is a joint publication of the Macao Economic Services (DSE), the Monetary Authority of Macao (AMCM) and the Statistics and Census Service (DSEC). DSE prepares the analysis of the World Economy and External Merchandise Trade, as well as data on tables I.1, I.2, II.7 and II.8. AMCM prepares the analysis of Money and Finance and data on tables VIII.1 to VIII.7. DSEC prepares the analysis and data on the remaining sections.

Further information can be obtained from the Documentation and Information Centre of DSEC.

Reproduction of these data is allowed provided the source is quoted.

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Editor: DSEC Macao, July 2019

Typesetting and design: DSEC Printing: DSEC

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THE WORLD ECONOMY

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The global economy maintained growth but slowed sharply, with weakening manufacturing figures, in the first quarter of 2019, dragged down by the considerable volatility in the international financial markets resulting from the persistent China-US trade conflicts. Trade protectionism and unilateralism continued to pose threats to global investment and trade, which together with rising geopolitical tensions and uncertainty about the form of Brexit brought obstacles and increased uncertainty over global economic development.

The World Economic Outlook (WEO) of the International Monetary Fund (IMF) in April 2019 indicated that the global expansion has weakened and risks to global growth are skewed to the downside amid an increase in trade tensions and the tightening of financial conditions; however, economic growth is expected to recover in the second half of 2019 as major economies may implement large-scale easing measures in the absence of inflationary pressure. The global economy is projected to grow by 3.3% in 2019, down by 0.2 percentage points from the forecast in January 2019, and the projected growth rate for 2020 is maintained at 3.6%. Economic growth projections for the US were revised downward by 0.2 percentage points to 2.3% for 2019 and marked upward by 0.1 percentage point to 1.9% for 2020. Growth forecast for China was revised upward from 6.2% to 6.3% for 2019 but marked downward from 6.2% to 6.1% for 2020. The projected growth rates for the Euro area in 2019 and 2020 were 1.3% and 1.5% respectively, down by 0.3 percentage points and 0.2 percentage points respectively from the forecast in January 2019. Growth projection for Japan in 2019 was revised downward by 0.1 percentage point to 1.0% while the growth for 2020 was held stable at 0.5%.

In early 2019, the US economy maintained a relatively rapid pace of growth, with the first-quarter Gross Domestic Product (GDP) rising by 3.2% year-on-year and 3.2%

quarter-to-quarter. Private consumption expenditure and domestic private investment added 0.8 percentage points and 0.9 percentage points to economic growth respectively;

government expenditure and investment contributed 0.4 percentage points to the increase, and net exports stimulated the growth by 1 percentage point. However, the unemployment rate grew by 0.5 percentage points quarter-to-quarter to 4.1% amid steady economic development; the seasonally adjusted unemployment rate rose by 0.1 percentage point to 3.9% quarter-to-quarter.

The economy of the Euro area continued to slow down, with the GDP in the first quarter growing by 1.2% year-on-year and 0.4% quarter-to-quarter; the growth in Germany slowed continuously with an increase of 0.6% year-on-year, while that in France was 1.1%.

Final consumption expenditure of households and non-profit institutions in the Euro area and gross fixed capital formation contributed 0.3 percentage points and 0.2 percentage

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points to the economic growth respectively; net exports added 0.1 percentage point to the increase while inventory hampered the growth by 0.3 percentage points. The unemployment rate rose by 0.2 percentage points quarter-to-quarter to 8.1%.

The UK economy maintained growth, with the GDP in the first quarter climbing by 1.8% year-on-year and 0.5% quarter-to-quarter. Household and government final consumption expenditure drove up the economic growth by 0.4 percentage points and 0.3 percentage points respectively; capital formation added 1.9 percentage points to the increase while net exports dragged down the growth by 2.2 percentage points. Economic growth remained modest, and the unemployment rate fell slightly by 0.2 percentage points from the previous quarter to 3.8%.

Economies in the Asian region continued to grow. The WEO of IMF in April 2019 indicated that the projected growth rates for India in 2019 and 2020 were both revised downward by 0.2 percentage points from the forecast in January 2019 to 7.3% and 7.5%

respectively. The growth projection for the ASEAN-5 economies^a in 2019 and 2020 stayed at 5.1% and 5.2% respectively. The growth forecast for the Middle East, North Africa, Afghanistan and Pakistan in 2019 dropped sharply from 2.4% in January to 1.5%, whereas the projected growth rate in 2020 increased from 3.0% to 3.2%.

The first-quarter GDP of Japan increased by 0.8% year-on-year and 0.5%

quarter-to-quarter. Private demand added 0.1 percentage point to the economic growth, and net exports of goods and services drove up the growth by 0.4 percentage points.

Employment situation was stable, with the unemployment rate remaining steady over the previous quarter at 2.4%; the seasonally adjusted unemployment rate also held stable at 2.4%.

The first-quarter GDP of the Republic of Korea slowed, rising by 1.8% year-on-year but dropping by 0.3% quarter-to-quarter. Final consumption expenditure drove up the economic growth by 0.1 percentage point, whereas fixed capital formation dragged down the growth by 0.6 percentage points; net exports added 0.2 percentage points to the expansion. The economy slowed down, with the unemployment rate rising markedly by 1.1 percentage points from the previous quarter to 4.5%.

The economy of Mainland China maintained rapid growth, with the GDP for the first quarter expanding by 6.4% year-on-year. In the first quarter of 2019, value added of the above-scale industries grew by 6.5% year-on-year in real terms; fixed asset investment (excluding farmers) rose by 6.3% year-on-year; total retail sales of consumer goods went

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up by 8.3%, with sales of petroleum & related products, daily necessities, cosmetics and communication equipment rising by 4.1%, 16.1%, 10.9% and 10.0% respectively. As regards external trade, total value of external trade for the first quarter of 2019 grew by 3.7% year-on-year. Inflation eased, with the growth in the Consumer Price Index (CPI) dropping by 0.3 percentage points year-on-year to 1.8%.

The Hong Kong economy continued to grow but slowed down notably in the first quarter, up slightly by 0.6% year-on-year and 1.3% quarter-to-quarter. Domestic demand was weak compared with the same quarter last year. Private consumption expenditure edged up by merely 0.2%; government consumption expenditure grew up steadily by 4.5%

and the annual growth of exports of services slowed from 3.3% in the previous quarter to 1.1% in real terms. Gross fixed capital formation exhibited a downward trend, down further by 7.1% in the first quarter. The seasonally adjusted unemployment rate stayed at 2.8%.

0 1 2 3 4 5 6 7

USA Euro Area Japan Mainland

China

United Kingdom

Hong Kong

%

GDP of major economies (Year-on-year change)

Q4/2018 Q1/2019

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ANALYSIS OF THE MACAO ECONOMY

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I. Overview

In the first quarter of 2019, the economy of Macao contracted by 3.2% year-on-year in real terms, ending the uptrend that had lasted for ten consecutive quarters. Total demand weakened due to feeble growth, leading to increased downward pressure on the economy.

External demand slowed; exports of services declined by 0.3% year-on-year, of which exports of gaming services and exports of other tourism services fell by 0.6% and 0.3%

respectively; exports of goods went down by 1.8%. Meanwhile, domestic demand remained sluggish; private consumption expenditure and government final consumption expenditure saw respective growth of 2.1% and 4.1%, whereas the decline in gross fixed capital formation widened from -14.3% in the previous quarter to -31.7%.

The following highlights year-on-year comparisons of major segments of the local economy in the first quarter of 2019:

1. Total external merchandise trade (exports plus imports) increased by 0.2%, with total merchandise exports rising by 22.4% while total merchandise imports falling by 2.8%;

visible trade deficit amounted to MOP18.06 billion.

2. Exports of gaming services and tourism services declined. Total exports of services contracted by 0.3% year-on-year in real terms in view of a decrease in gross gaming revenue (-0.5%), despite the increases in visitor arrivals (+21.2%) and total spending of visitors (+3.1%). Exports of gaming services and exports of other tourism services fell by 0.6% and 0.3% respectively as compared to the respective growth of 6.7% and 1.4% in the previous quarter. Meanwhile, imports of services went down by 20.9%.

3. Private consumption expenditure showed modest growth and inflation pressures eased. Employment situation was favourable, with the unemployment rate being at a relatively low level of 1.7%. Median monthly employment earnings increased; number of non-resident workers went up by 4.5%. Private consumption expenditure and government final consumption expenditure showed respective growth of 2.1% and 4.1% year-on-year. The Composite Consumer Price Index (Composite CPI) grew by 2.9%, with a modest price growth and a slight increase in inflation.

4. Investment continued to decrease. Private investment fell by 15.0%, of which construction investment dropped by 20.4% but equipment investment grew by 11.3%.

Public investment plunged by 82.0%. Meanwhile, number of newly incorporated companies rose by 160, and the value of registered capital surged by 428.7%.

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5. Volume and value of property transactions reduced. Number of building units purchased and sold decreased by 20.3% quarter-to-quarter, and the total value fell by 25.5%. Meanwhile, the average transaction price per square metre of residential units went down by 4.8% quarter-to-quarter.

6. Public finance remained sound and recorded a fiscal surplus. Total government revenue and expenditure amounted to MOP34.00 billion and MOP12.29 billion respectively in the first quarter. A fiscal surplus of MOP21.71 billion was registered attributable to a rise in gaming revenue within public revenue.

II. Major Segments of the Economy

A. External Merchandise Trade

Overview

External merchandise trade of Macao increased by 0.2% from MOP25.30 billion in the first quarter of 2018 to MOP25.34 billion in the same quarter of 2019. Merchandise imports fell by 2.8% to MOP21.70 billion, whereas merchandise exports went up by 22.4% to MOP3.64 billion. The exports-imports ratio was 16.8%, up by 3.5 percentage points year-on-year. Merchandise trade deficit reduced from MOP19.35 billion in the first quarter of 2018 to MOP18.06 billion.

Total Exports

Total merchandise exports increased by 22.4% year-on-year in the first quarter of 2019, with domestic exports declining by 16.5% while re-exports rising by 28.4%.

Analysed by destination, merchandise exports to Singapore (MOP6.5 million), the USA (MOP48.9 million), Japan (MOP16.2 million) and Hong Kong (MOP2.58 billion) grew by 96.8%, 53.5%, 41.7% and 34.2% respectively. Meanwhile, exports to Vietnam (MOP5.0 million), India (MOP8.9 million), mainland China (MOP415.0 million) and the EU (MOP38.7 million) saw respective decreases of 61.0%, 41.7%, 12.2% and 3.0%.

Exports of machines, apparatus & parts, the leading export commodity, rose by 49.0%

to MOP737.8 million, accounting for 20.3% of the total exports. Exports of diamond &

diamond jewellery, textiles & garments, other products and watches registered respective

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growth of 141.2%, 29.8%, 4.9% and 1.6%, whereas exports of copper & articles thereof, electronic components and tobacco & wine fell by 14.9%, 13.0% and 7.6% respectively.

-40 -30 -20 -10 0 10 20 30 40 50 60 70

Q1 Q2 Q3 Q4 Q1

2018 2019

%

座標軸標題

Merchandise exports (Year-on-year change)

Total exports USA Mainland China Hong Kong

Domestic Exports

Domestic exports amounted to MOP331.0 million (9.1% of total exports), down by 16.5% year-on-year and 10.6% quarter-to-quarter. Hong Kong remained the largest market of Macao’s domestic exports (45.5% of total domestic exports), despite a 31.0%

decrease in the value of exports to Hong Kong. Domestic exports to the USA and the EU increased by 25.3% and 19.0% respectively. Analysed by types of commodities, exports of garments (5.2% of total domestic exports) rose by 50.0%, of which exports to the EU (19.2% of total domestic exports of garments) went up by 51.9% and those to the USA (49.7%) grew by 46.1%. Meanwhile, exports of copper and articles thereof (30.1% of total domestic exports) and exports of other products (42.1%) fell by 14.9% and 25.9%

respectively.

Domestic exports to mainland China declined by 15.1% to MOP66.3 million (20.0% of total domestic exports), of which tariff-free merchandise exports under the Mainland and Macao Closer Economic Partnership Arrangement (CEPA) decreased by 4.2% to MOP18.1 million, consisting mainly of copper-clad boards (85.2% of total). The amount of tariff saved totalled MOP854 thousand.

In addition, results of the Industrial Exports Survey for the first quarter of 2019 indicated that the average length of time of orders on hand of the interviewed manufacturers was 2.9 months, down by 6.5% from 3.1 months in the same quarter of

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2018. Meanwhile, 37.2% of the enterprises expressed optimism about the domestic industrial exports in the coming six months, up by 36.0 percentage points quarter-to-quarter and 24.1 percentage points year-on-year; among them, 0.2%

anticipated a substantial increase and 37.0% expected a modest rise. There were 7.7% of the enterprises predicting less promising prospects of exports, down by 7.4 percentage points quarter-to-quarter but up by 2.9 percentage points year-on-year; 55.1% expected the outlook of exports to remain stable, down by 28.6 percentage points quarter-to-quarter and 26.4 percentage points year-on-year. The findings showed that the manufacturers were optimistic about the outlook of exports.

Re-exports

Total value of re-exports rose by 28.4% to MOP3.31 billion (90.9% of total exports) in the first quarter of 2019. Hong Kong was the largest market of Macao’s re-exports (73.4%

of total re-exports), followed by mainland China (10.5%). Value of re-exports to Hong Kong increased by 42.6% while those to mainland China decreased by 11.6%. In terms of the types of commodities, re-exports of other products (40.9% of total re-exports) and consumer goods (56.4%) grew by 36.4% and 26.9% respectively, whereas those of raw materials & semi-manufactures (2.7%) reduced by 21.9%.

Imports

Total value of merchandise imports slid by 2.8% year-on-year to MOP21.70 billion in the first quarter of 2019. Mainland China was the main supplier of goods imported to Macao (33.9% of total imports), and the value of imports totalled MOP7.36 billion, down by 3.5%. As regards other places of origin, value of imports from the USA (4.4%), Switzerland (8.3%), the Republic of Korea (2.5%) and the EU (27.1%) went up by 28.1%, 5.5%, 1.3%

and 0.7% respectively; meanwhile, value of imports from Hong Kong (7.2%) and Japan (6.6%) declined by 15.9% and 16.7% respectively.

Regarding the types of commodities, imports of consumer goods (70.1% of total imports) and fuels & lubricants (7.3%) saw respective increases of 6.0% and 1.0%, whereas imports of raw materials & semi-manufactures (8.2%) and capital goods (14.4%) fell by 17.9% and 26.2% respectively.

Imports of consumer goods showed steady growth, with imports of beauty, cosmetic /skin-care products (7.0% of total imports) , clothing & footwear (10.8%), motor cars &

motorcycles (2.5%), other consumer goods (14.1%) and watches (7.7%) rising by 32.3%, 29.8%, 18.3%, 8.0% and 4.2% respectively. On the other hand, imports of handbags &

wallets (4.9%), food & beverages (15.3%) and gold jewellery (7.9%) decreased by 2.9%,

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5.8% and 10.2% respectively.

-30 -20 -10 0 10 20 30 40 50 60 70

Q1 Q2 Q3 Q4 Q1

2018 2019

%

Merchandise imports and the main components (Year-on-year change)

Total imports Consumer goods

Capital goods Raw materials and semi-manufactures

B. Gaming, Tourism and MICE

Exports of gaming services fell by 0.6% in real terms due to a decrease in gross gaming revenue; in addition, exports of other tourism services declined by 0.3% in real terms on account of a slowdown in total spending of visitors. Both dragged down exports of services by 0.3%. As regards MICE events, a total of 377 meetings/conferences and exhibitions were held, attracting 332,805 participants and attendees.

Gaming

Gross gaming revenue amounted to MOP76.37 billion in the first quarter of 2019, down by 0.5% year-on-year. Gross revenue from games of chance, which took up 99.7%

of the total, decreased by 0.5% to MOP76.15 billion, of which VIP Baccarat revenue fell by 13.4% to account for 49%, while gross revenue of the mass market showed continued growth. Meanwhile, gross revenue of pari-mutuels and lotteries decreased by 8.8% to MOP219.1 million.

Number of casinos operating in the first quarter of 2019 held steady year-on-year and quarter-to-quarter at 41. Gaming tables totalled 6,624, representing an increase of 0.6%

year-on-year and 0.5% quarter-to-quarter. Number of slot machines was 17,122, down by 0.5% year-on-year but up by 6.6% quarter-to-quarter.

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0 10 20 30 40 50 60 70 80

Q1 Q2 Q3 Q4 Q1

2018 2019 Billion MOP %

Gross gaming revenue

Gross gaming revenue Year-on-year change

Visitor Arrivals

Attributable to the opening of the Hong Kong-Zhuhai-Macao Bridge, visitor arrivals surged by 21.2% to 10,359,758 in the first quarter of 2019, with mainland visitors rising by 23.5% to 7,448,291. Mainland visitors travelling to Macao under the Individual Visit Scheme (IVS) went up by 21.2% to 3,826,241, constituting 51.4% of the total visitors from mainland China. Visitors from Hong Kong, the Republic of Korea, Japan and Taiwan increased by 21.3%, 9.2%, 9.0% and 3.3% respectively year-on-year. Meanwhile, overnight visitors rose by 9.3% to 4,735,026, albeit a decrease of 5.0 percentage points in its proportion (45.7%) of the total visitors. Same-day visitors grew by 33.4% to 5,624,732.

The average length of stay of visitors was 1.1 days, down by 0.1 day year-on-year.

Package tour visitors increased by 12.1% to 2,385,790.

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0 1 2 3 4 5 6 7 8

Q1 Q2 Q3 Q4 Q1

2018 2019

Million Principal visitor markets

Mainland China Hong Kong Taiwan Republic of Korea

Hotels and Guesthouses

There were 117 hotels and guesthouses operating in Macao at the end of the first quarter of 2019, up by 1.7% year-on-year and 0.9% quarter-to-quarter. A total of 38,770 guest rooms were available, an increase of 822 (+2.2%) year-on-year; five-star hotel rooms accounted for 63.1% of the total. Number of guests of hotels and guesthouses rose by 4.6% to 3,518,337, taking up 71.0% of the total overnight visitors. The average occupancy rate of hotels and guesthouses grew by 1.9 percentage points year-on-year to 91.9%, and the average length of stay of guests stayed the same at 1.5 nights.

Visitor Spending

Total spending of visitors amounted to MOP16.93 billion, up by 3.1% year-on-year.

Total spending of overnight and same-day visitors increased by 1.9% and 7.2%

respectively year-on-year.

Per-capita spending of visitors was MOP1,634, down by 14.9% year-on-year.

Per-capita spending of overnight visitors dropped by 6.8% to MOP2,729, and that of same-day visitors went down by 19.7% to MOP712. Mainland visitors spent an average of MOP1,849, down by 17.2%, with spending of IVS visitors falling by 9.4% to MOP2,317.

Per-capita spending of visitors from Malaysia (MOP1,363), Singapore (MOP1,682), Taiwan (MOP1,460) and Hong Kong (MOP900) fell by 20.4%, 13.6%, 11.7% and 8.5%

respectively. Visitors from Australia had relatively high per-capita spending among the long-haul visitors, at MOP1,376, down by 7.8%.

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Analysed by structure of spending, visitors spent mainly on Shopping (48.4% of total), Accommodation (25.1%) and Food & Beverage (18.9%). Per-capita shopping spending went down by 13.2% year-on-year, of which spending on Others had the largest decline of 36.0%, followed by that on Clothing and Local Food Products with respective decreases of 29.4% and 19.2%. Local Food Products and Cosmetics & Perfume accounted for relatively large shares of shopping spending, at 29.6% and 27.8% respectively.

0 500 1 000 1 500 2 000 2 500

Q1 Q2 Q3 Q4 Q1

2018 2019 MOP

Per-capita spending of visitors from selected markets

Mainland China Hong Kong Taiwan Singapore Japan

MICE (Meetings, Incentives, Conventions and Exhibitions)

A total of 377 MICE events were held in the first quarter of 2019, drawing 332,805 participants and attendees. There were 362 meetings and conferences, up by 15.3%

year-on-year, and number of participants rose by 18.1% to 84,298; meetings and conferences with a duration of 4 hours or more totalled 263, with 73,507 participants.

Number of exhibitions held steady year-on-year at 10; exhibition attendees totalled 235,366, up by 22.1%.

C. Consumption and Prices

Private Consumption

Private consumption expenditure increased by 2.1% year-on-year in real terms, lower than the 2.8% rise in the previous quarter; household final consumption expenditure in the domestic market and abroad grew by 1.3% and 7.9% respectively. On the other hand, consumption of durable goods declined by 13.3%.

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Retail Sales

Value of retail sales totalled MOP20.38 billion, down by 1.9% year-on-year but up by 2.6% quarter-to-quarter. Value of retail sales of Communication equipment (3.5% of total) dropped notably by 19.9% year-on-year. Sales value of Motor vehicles (2.6%), Adults’

clothing (12.4%) and Goods in pharmacies (2.6%) fell by 16.7%, 12.9% and 8.4%

respectively year-on-year; in addition, retail sales value of Watches, clocks & jewellery (20.9%) saw a decrease of 3.0%.

After removing the effect of prices, volume of retail sales slid by 2.1% year-on-year, with a larger drop being observed in the sales volume of Motor vehicles (-22.9%), Communication equipment (-14.0%) and Adults’ clothing (-13.6%). Meanwhile, volume of retail sales grew by 3.9% quarter-to-quarter, of which sales volume of Leather goods (+18.3%) and Goods in department stores (+11.7%) recorded significant growth, but that of Motor vehicles and Communication equipment went down by 29.1% and 8.2%

respectively.

0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500

Q1 Q2 Q3 Q4 Q1

2018 2019

MOP million Value of selected retail sales

Adults' clothing Motor vehicles Leather goods

Goods in department stores Watches, clocks & jewellery

Prices

The average Composite CPI rose by 2.9% year-on-year, smaller than the 3.1%

growth in the previous quarter. Inflation increased slightly with a modest price growth.

Price indices of Education (+5.9%), Transport (+5.2%) and Clothing & footwear (+4.1%) saw relatively high increases. In addition, the implicit deflator of GDP that measures changes in overall prices went up by 3.2% year-on-year but dropped by 0.1 percentage point from the previous quarter.

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0 1 2 3 4 5

Q1 Q2 Q3 Q4 Q1

2018 2019

%

Composite CPI and Implicit Deflator of GDP (Year-on-year change)

Composite CPI Implicit Deflator of GDP

D. Employment

The general labour force participation rate was 70.4% in the first quarter, a decrease of 0.5 percentage points quarter-to-quarter; the labour force participation rate of local residents was 64.0%, down by 0.6 percentage points. Economically active population (labour force) increased by 1.4% year-on-year to 393,600 and employed population went up by 1.7% to 387,100, attributable to the growth in the employed population in Real Estate & Business Activities, Construction and Domestic Work. Employment in Recreational, Cultural, Gaming & Other Services reached 96,000, with 84,000 engaging in Gaming & Junket Activities, accounting for 21.7% of the total employment. Employment in Real Estate & Business Activities and Construction had relatively high growth of 10.1%

and 8.2% respectively. Non-resident workers totalled 189,515 at the end of the quarter, up by 4.5% year-on-year; among them, 28.1% were working in Hotels, Restaurants & Similar Activities, 15.8% in Construction and 15.6% in Domestic Work.

Job market remained stable. The general unemployment rate was 1.7%, down by 0.2 percentage points year-on-year but remaining unchanged quarter-to-quarter; the unemployment rate of local residents was 2.3%, down by 0.3 percentage points year-on-year and 0.1 percentage point quarter-to-quarter. The underemployment rate was 0.4%. Total number of the unemployed was about 6,500, with 8.5% being new labour market entrants seeking their first job. Analysed by the previous industry engaged of the unemployed, 25.1% had worked in Construction and 25.0% in Recreational, Cultural, Gaming & Other Services. In terms of educational attainment, 34.5% had tertiary education, 24.1% had senior secondary education and 21.3% had primary education.

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Median monthly employment earnings of the employed was MOP17,000, up by 6.3%

year-on-year and quarter-to-quarter. Median earnings of the employed residents stayed the same year-on-year and quarter-to-quarter, at MOP20,000. Analysed by industry, median employment earnings in Real Estate & Business Activities logged the highest year-on-year increase of 16.0%. For Gaming & Junket Activities that accounted for the largest share of total employment, median employment earnings remained unchanged year-on-year.

1.6 1.7 1.8 1.9 2.0

375 380 385 390 395

Q1 Q2 Q3 Q4 Q1

2018 2019 Thousand persons %

Employed population and unemployment rate

Employed population Unemployment rate

E. Investment

Investment in Construction and Equipment

Overall investment decreased by 31.7% year-on-year, of which construction investment dropped by 37.5% in real terms while equipment investment grew by 4.5% in real terms. Private investment in fixed assets slid by 15.0% and government investment in fixed assets tumbled by 82.0%. The decline in investment in public construction was due to the completion of the Macao boundary crossing area of the Hong Kong-Zhuhai-Macao Bridge, in which the government had made large investment.

For the investment by the private sector, number of units and gross floor area of buildings with licence of use issued in the first quarter plummeted by 84.1% and 98.2%

respectively; meanwhile, number of units and gross floor area of buildings with construction permit issued fell by 85.3% and 83.7% respectively. Construction investment by the private sector dropped by 20.4% in real terms in the first quarter, due mainly to the

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successive completion of large-scale construction projects and a decrease in new projects;

equipment investment by the private sector, however, rose by 11.3%.

As regards investment by the public sector, construction investment and equipment investment in the first quarter plunged by 82.3% and 75.6% respectively.

0 100 200 300 400 500

Q1 Q2 Q3 Q4 Q1

2018 2019 Thousand m²

Gross floor area of buildings with construction permit issued and licence of use issued

Buildings with construction permit issued Buildings with licence of use issued

Transactions on Real Estate

Real estate transactions in the first quarter dropped as compared with the previous quarter, with 1,850 building units and parking spaces being purchased and sold, down by 20.3% quarter-to-quarter; total value of transactions decreased by 25.5%

quarter-to-quarter to MOP10.55 billion.

A total of 1,379 residential units (comprising 193 pre-sale units and 1,186 existing units) were purchased and sold at MOP8.32 billion in the first quarter, accounting for 74.5% and 78.8% of the respective total.

As regards status of the buyers, 1,778 units were purchased by Macao residents, constituting 96.1% of the total; value of transactions amounted to MOP9.92 billion, with its proportion of the total value remaining unchanged quarter-to-quarter at 94.0%. Meanwhile, 53 units were purchased by non-residents, and the value amounted to MOP462.4 million.

The average transaction price of residential units decreased by 4.8%

quarter-to-quarter to MOP102,576 per square metre of usable area in the first quarter. The average price of those in the Macao Peninsula went down by 1.2% quarter-to-quarter to

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MOP98,693 per square metre, and the average price of those in Taipa fell by 8.4% to MOP105,065 per square metre. Meanwhile, the average price of office units slid by 13.3%

quarter-to-quarter to MOP101,990 per square metre, and that of industrial units decreased by 5.5% to MOP51,640 per square metre.

0 1 000 2 000 3 000 4 000 5 000 6 000

0 10 20 30 40

Q1 Q2 Q3 Q4 Q1

2018 2019

Number MOP billion

Total number and value of building units purchased and sold

Number of building units transacted Value of building units transacted

Business Investment

Number of newly incorporated companies increased by 160 year-on-year to 1,613 in the first quarter, and the total value of registered capital soared by 428.7% to MOP1.24 billion. Among the new companies, 33.4% were operating in Wholesale & Retail Trade, 29.1% in Business Services and 10.5% in Construction. In terms of registered capital, Financial Services (84.5%) predominated, followed by Transport, Storage &

Communications (5.2%) and Business Services (4.7%). As regards origin of capital, capital from the British Virgin Islands constituted 80.6% of the total, at MOP1.00 billion, and that from Macao and Hong Kong took up 14.2% and 2.8% respectively.

Number of companies in dissolution decreased by 54 year-on-year to 210 in the first quarter, with 79 engaging in Wholesale & Retail Trade (37.6% of total), 58 in Business Services (27.6%), 27 in Construction (12.9%) and 23 in Real Estate (11.0%).

F. Public Accounts

According to the data from the central account, total government revenue in the first quarter of 2019 rose by 8.5% to MOP34.00 billion, owing to the increases in concession revenue and sale of facilities & equipment. Gaming revenue in public revenue grew by

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6.1% to MOP29.64 billion.

Meanwhile, total government expenditure went down by 20.2% to MOP12.29 billion due to a decrease of MOP4.13 billion in the expenditure on facilities and equipment. Fiscal surplus stood at MOP21.71 billion in the first quarter, higher than the MOP15.92 billion surplus in the same quarter of 2018.

0 5 10 15 20 25 30 35 40

Q1 Q1

2018 2019 MOP billion

Total government revenue and expenditure

Total revenue Total expenditure Fiscal surplus/deficit

G. Money and Finance

At the end of March 2019, narrow money supply M1 went up by 5.4% year-on-year, of which currency in circulation and demand deposits increased by 5.4% and 5.5%

respectively. Meanwhile, broad money supply M2 (including M1 and quasi-monetary liabilities) rose by 9.6%. In terms of currency structure, the share of the Macao pataca (MOP) in M1 rose by 0.4 percentage points year-on-year to 55.3%, while its share in M2 reduced by 0.2 percentage points to 30.9%. Besides, the shares of the Hong Kong dollar, the Chinese renminbi and the US dollar in M2 were 51.7%, 4.5% and 11.0% respectively.

Resident deposits increased by 9.7% year-on-year to MOP645.34 billion. In terms of type of currency, the shares of the MOP, the Hong Kong dollar, the Chinese renminbi and the US dollar were 29.1% (MOP187.87 billion), 53.1% (MOP342.55 billion), 4.6%

(MOP29.88 billion) and 11.3% (MOP72.73 billion) respectively. Meanwhile, public sector deposits with the banking sector grew by 22.2% to MOP239.60 billion.

Domestic loans extended to the private sector rose by 10.0% year-on-year to MOP510.96 billion, of which the outstanding value of credit to individuals for housing loans

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reached MOP171.06 billion, up by 13.6%. Within domestic loans to the private sector, those denominated in the MOP and the Hong Kong dollar accounted for 31.5% and 64.8%

respectively, at MOP160.92 billion and MOP330.97 billion.

0 100 200 300 400 500 600 700

Q1 Q2 Q3 Q4 Q1

2018 2019 MOP billion (value at

the end of the period)

Resident deposits and loans

Resident deposits Credit to individuals for housing loans Other domestic loans to the private sector

The loan-to-deposit ratio of the banking sector for residents was 57.7%, down by 1.5 percentage points from a year earlier, whereas that for both resident and non-resident sectors increased by 4.7 percentage points to 95.0%.

As the MOP is indirectly pegged to the US dollar, interest rates in Macao are normally adjusted to be in line with those in the US. In the first quarter of 2019, the US Federal Reserve maintained the range for the Fed funds rate at 2.25% - 2.50%. The Base Rate of the Monetary Authority of Macao was also held stable at 2.75%.

As the US dollar strengthened in the first quarter of 2019, the exchange rates of the MOP against major currencies generally increased. The average exchange rates of the MOP against the Australian dollar, the euro and the British pound went up year-on-year by 10.2%, 7.9% and 6.5% respectively, while the rate against the US dollar went down by 0.2%. The effective exchange rate index for the MOP, a gauge of exchange rates of the MOP against currencies of Macao’s major trading partners, rose by 4.47 points year-on-year to 105.60 in the first quarter.

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H. Other Economic Indicators

Transport and Communications

In the first quarter, gross weight of containerised cargo by land (4,604 tonnes) rose by 47.3%, while that of seaborne containerised cargo (37,448 tonnes) and air cargo (8,647 tonnes) fell by 2.1% and 1.8% respectively.

As regards local transport, new registration of motor vehicles in the first quarter decreased by 25.5%, with that of automobiles and motorcycles declining by 25.7% and 25.3% respectively. At the end of March 2019, number of licensed motor vehicles dropped by 0.2% to 238,725, comprising 115,298 automobiles and 123,093 motorcycles.

At the end of March 2019, number of Internet subscribers was 553,293, up by 6.3%

year-on-year; total duration of internet usage reached 375.3 million hours in the first quarter, an increase of 21.3% year-on-year. Meanwhile, number of mobile phone subscribers decreased by 7.6% to 2,150,767, and number of fixed telephone lines dropped by 5.8% to 122,351.

Water and Energy Consumption

Consumption of electricity increased by 5.0% to 1.15 billion kWh in the first quarter, and that of water rose by 4.1% to 21.9 million cubic metres. Meanwhile, consumption of liquid fuel (gasoline, kerosene, gas oil & diesel, and fuel oil) rose by 2.9% to 56.0 million litres, while consumption of liquefied petroleum gas (LPG) went down by 4.4% to 11,766 tonnes. Consumption of natural gas totalled 6.6 million cubic metres.

III. Concluding Remarks

In the first quarter of 2019, the economy of Macao shrank by 3.2% year-on-year in real terms, the first quarterly decline since the third quarter of 2016. The contraction was mainly attributable to a decrease in exports of services and a larger drop in gross fixed capital formation. Despite the downward adjustment of economic growth, positive factors such as favourable employment situation, the relatively low unemployment rate, the surplus in public accounts and the modest rise in CPI, are conducive to stable economic development.

Looking ahead to the second quarter of 2019, private consumption expenditure and government final consumption expenditure are expected to remain stable, while

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investment may continue to decline; as a result, domestic demand will remain weak. As regards external demand, merchandise exports went down by 12.9% in April, while number of visitors rose by 15.9%; gross revenue from games of chance fell by 3.3%

year-on-year in April and May, a steeper decline compared to the 0.5% decrease recorded in January and February; exports of services, therefore, is anticipated to drop in the second quarter. Taking these factors into consideration, the economy is projected to continue its downward trend in the second quarter with both domestic and external demand staying sluggish.

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SYMBOLS AND ABBREVIATIONS

.. Not applicable r Revised figures

- Absolute value equals zero

# Confidential data

~ No figure provided

0^# Magnitude less than half of the unit employed p Provisional figures

p.p. Percentage point

@ Figures are subject to revision later on

TEU Twenty-foot Equivalent Unit (20 feet × 8 feet × 8 feet)

MOP Macao pataca

Note: Due to rounding, total may not correspond to the sum of the partial figures.

Figures are subject to regular revisions when required.

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I. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD AND MACAO

1. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD (YEAR-ON-YEAR COMPARISON)

%

2018 2018 2018 2018 2019

Q1 Q2 Q3 Q4 Q1

USA

　Gross Domestic Product 1.6 2.2 2.9 2.6 2.9 3.0 3.0^r 3.2

　Exports of goods -3.1 6.6 7.7^r 8.0 11.3 8.2^r 3.4 1.4

　Imports of goods -1.8 6.9 8.6 9.0 8.5 10.7 6.3 -0.1

　Consumer Price Index 1.3 2.1 2.4 2.2 2.7 2.6 2.2 1.6

　Unemployment rate 4.9 4.4 3.9 4.3 3.8 3.9 3.6 4.1

Euro area ^a

　Gross Domestic Product 1.9^r 2.4 1.9^r 2.4 2.2^r 1.7^r 1.2^r 1.2

　Exports of goods 0.3 7.1 3.8^r 2.2^r 4.4^r 4.7 3.9^r 3.9

　Imports of goods -1.3^r 10.0 6.6^r 2.3^r 6.2^r 10.3^r 7.8^r 4.8

Germany

　Gross Domestic Product 2.2 2.2 1.4^r 1.4 2.3 1.1 0.9 0.6

　Exports of goods 0.9 6.2 3.0 2.7 5.1 2.9 1.4^r 2.5

　Imports of goods 0.6 8.0 5.7 3.6 6.3 8.1 4.9 4.9

France

　Gross Domestic Product 1.1 2.3 1.6^r 2.2 1.7 1.4^r 1.0^r 1.1

　Exports of goods -0.9^r 5.1^r 3.9^r 5.0^r 3.0^r 3.4^r 4.1^r 6.6

　Imports of goods -0.2 7.1^r 3.7^r 2.2^r 5.7^r 3.8^r 3.1^r 5.2

United Kingdom

　Gross Domestic Product 1.8 1.8 1.4 1.2^r 1.4 1.6 1.4^r 1.8

　Exports of goods 4.3 13.3 3.5^r 3.6^r 2.7^r 3.7^r 4.1^r 6.4

　Imports of goods 6.7 10.2 2.7 0.8^r 1.7^r 3.5^r 4.8^r 14.2

a Consists 19 member states since 2015.

Source : U.S. Bureau of Economic Analysis, U.S. Census Bureau, U.S. Bureau of Labor Statistics Eurostat

Federal Statistical Office of Germany

National Institute of Statistics and Economic Studies of France; French Customs Office for National Statistics of United Kingdom

2016 2017 2018

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1. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD (YEAR-ON-YEAR COMPARISON) (Cont'd)

%

2018 2018 2018 2018 2019

Q1 Q2 Q3 Q4 Q1

Mainland China

　Gross Domestic Product 6.7 6.9 6.6 6.8 6.7 6.5 6.4 6.4

　Exports of goods -7.7 7.9 10.4^r 13.7 12.1^r 12.2^r 4.8^r 1.4

　Imports of goods -5.5 16.1 15.9^r 19.4 20.4^r 20.2^r 4.8^r -4.7

　Consumer Price Index^a 2.0 1.6 2.1 2.1 2.0 2.1 2.1 1.8

Hong Kong

　Gross Domestic Product 2.2 3.8 3.0 4.6 3.6^r 2.8 1.2^r 0.6

　Exports of goods -0.5 8.0 7.3 9.7 9.0 9.0 2.2 -2.4

　Imports of goods -0.9 8.7 8.4 10.6 10.4 11.5 1.8 -3.2

Taiwan

　Exports of goods^b -1.8 13.2 5.9 10.6 11.2 3.0 0.1 -4.2

　Imports of goods^b -2.8 12.4 10.4 11.0 10.6 13.7 6.7 -0.8

Japan

　Gross Domestic Product^c 0.9^r 1.9 0.6^r 1.3 1.5 0.1 0.2^r 0.8

　Exports of goods -7.4 11.8 4.1 4.9 7.5 2.9 1.3 -3.9

　Imports of goods -15.8 14.1 9.7 7.7^r 7.5 12.4 11.2 -2.0

　Consumer Price Index -0.1 0.5 1.0 1.3 0.6 1.1 0.9 0.3

Republic of Korea

　Exports of goods -5.9 15.8 5.4^r 9.8 3.1 1.7 7.7^r -8.5

　Imports of goods -6.9 17.8 11.9^r 13.7 13.0 7.8 12.9 -6.8

Singapore

　Gross Domestic Product 3.0^r 3.7^r 3.1^r 4.6^r 4.2 2.6^r 1.3^r 1.2

　Exports of goods -5.1 10.3 7.9 2.3 9.3 12.7 7.2 -

　Imports of goods -4.7 12.1 10.6 2.8 11.1 17.0 11.5 4.6

　Consumer Price Index -0.5 0.6 0.4 0.2 0.3 0.7 0.5 0.5

　Unemployment rate 2.1 2.2 2.1 1.9 2.7 1.9 1.9^r 2.0

a Accumulated year-on-year comparison.

b Imports and exports of goods are compiled according to the general trade system.

c Refer to annualised growth rates.

Source : National Bureau of Statistics of China

Census and Statistics Department of Hong Kong SAR

Directorate-General of Budget, Accounting and Statistics, Executive Yuan, Taiwan; Ministry of Economic Affairs, Taiwan Economic and Social Research Institute of Japan; Ministry of Finance of Japan; Statistics Bureau of Japan

National Statistics Office of Republic of Korea; Bank of Korea The Singapore Department of Statistics

2016 2017 2018

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2. PRINCIPAL ECONOMIC INDICATORS OF THE WORLD (QUARTER-TO-QUARTER COMPARISON)

%

2018 2018 2018 2018 2019

Q1 Q2 Q3 Q4 Q1

USA

　Gross Domestic Product 1.6 2.2 2.9 2.2 4.2 3.4 2.2^r 3.2

　Exports of goods -3.1 6.6 7.7^r 1.8 4.4 -1.7^r -0.9 2.4

　Imports of goods -1.8 6.9 8.6 3.0 - 2.6 - 0.6

　Unemployment rate^a 4.9 4.4 3.9 4.1 3.9 3.8 3.8 3.9

Japan

　Gross Domestic Product 0.9^r 1.9 0.6^r -0.1^r 0.5^r -0.6^r 0.4^r 0.5

　Exports of goods -7.8 12.4 4.1 -0.9^r 1.9^r -0.4^r 0.2^r -4.7

　Imports of goods -15.9^r 14.4^r 9.4^r 2.7^r 0.6^r 3.4^r 2.5^r -6.9

　Consumer Price Index -0.1 0.5 1.0 0.7 -0.4 0.5 - 0.2

Hong Kong

　Gross Domestic Product 2.2 3.8 3.0 1.9 -0.3 0.1 -0.5^r 1.3

　Exports of goods -0.5 8.0 7.3 2.1 1.2 1.0 -3.9 -2.8

　Imports of goods -0.9 8.7 8.4 2.4 1.1 2.1 -5.4 -2.9

a After seasonal adjustment.

Source : U.S. Bureau of Economic Analysis, U.S. Census Bureau, U.S. Bureau of Labor Statistics

Economic and Social Research Institute of Japan; Ministry of Finance of Japan; Statistics Bureau of Japan Hong Kong SAR Census and Statistics Department

3. GROSS DOMESTIC PRODUCT OF MACAO

2018 2018 2018 2018 2019

Q1 Q2 Q3 Q4 Q1^@

At current prices:

GDP (Million MOP) 362 356 405 790 440 316 108 422 106 053 107 099 118 742 108 304

GDP per capita ('000 MOP) 561.1 625.3 666.9

Chain volume measures in chained (2017) dollars:

GDP (Million MOP) 369 895 405 790 424 895 105 991 103 404 103 240 112 260 102 581

Year-on-Year change in real terms (%)

GDP -0.9 9.7 4.7 9.3 6.0 1.9 2.1 -3.2

Private consumption expenditure -0.8 2.2 4.5 5.3 5.9 4.2 2.8 2.1

In the domestic market -1.1 2.0 4.5 5.8 5.2 3.9 3.1 1.3

Abroad 1.3 4.8 5.8 2.2 7.1 5.0 8.5 7.9

Government final consumption expenditure 4.5 0.6 3.8 1.5 4.4 5.7 3.4 4.1

Gross fixed capital formation -11.9 -4.7 -12.5 0.9 -14.4 -21.4 -14.3 -31.7

Private sector -12.4 -10.5 -18.6 -16.0 -18.4 -19.6 -20.4 -15.0

Government -8.1 41.0 17.2 145.7 8.3 -31.8 4.0 -82.0

Exports of goods -20.3 13.1 11.0 13.9 30.7 -8.1 10.2 -1.8

Exports of services -0.8 17.0 9.4 15.3 11.9 6.2 5.2 -0.3

Imports of goods -12.6 5.6 4.7 9.5 7.0 0.9 2.3 2.0

Imports of services -1.6 11.2 9.8 28.8 13.9 1.7 -1.7 -20.9

2018

2016

2016 2017

2017 2018

MACAO ECONOMIC BULLETIN