The University of Macau (UM) announced yesterday that it has lowered its forecast for Macau’s 2025 gross domestic product (GDP) growth to 6.8 percent after considering the possibility of reduced spending power of visitors to Macau including those from the mainland due to the adverse impact of the United States’ recent tariff hikes, targeting virtually every country around the world, on the global economy.
The public university announced its revised 2025 economic forecast in a statement yesterday. The university’s annual forecast for Macau’s economy is carried out by a research team consisting of economists from its Department of Economics. The GDP forecast project is administered by the university’s Centre for Macau Studies (CMS).
The research team initially predicted in January that Macau’s economy would grow 7.7 percent in real terms in 2025.
According to official statistics, the statement pointed out, after rapid growth in 2023, Macau’s real GDP continued to grow rapidly in the first quarter of 2024, up 23.0 percent year on year, but its economic growth began to slow down afterwards, with a year-on-year growth of 7.1 percent in the second quarter, 3.8 percent in the third quarter, and only 3.4 percent in the fourth quarter, the statement noted.
In the whole of 2024, Macau’s GDP grew 8.8 percent in real terms, the statement noted.
The statement noted that since taking office in January, US President Donald Trump’s administration has launched a string of new trade policies and tariff measures, leading to volatility in global trade, which has also created potential inflationary pressures in the US, making it difficult to lower interest rates, which has had a negative impact on global economic growth.
The statement noted that the US tariff hikes cover various countries around the world, but with many of them targeting China in particular.
Moreover, the statement said, the Chinese mainland’s economic growth is experiencing a slowdown due to its structural changes, adding that how the country addresses the issue will largely determine its economic growth in the near future.
As the most important market for Macau’s exports of services, the statement said, the Chinese mainland’s economic performance will directly determine Macau’s economic growth.
The statement underlined that Macau’s 2025 economic growth prospects continue to be subject to various “unstable” factors, both domestically and internationally, because of which the research team has now lowered its forecast for Macau’s 2025 real GDP growth to 6.8 percent.
Speaking to reporters on the UM campus yesterday, Kwan Fung, assistant professor of the university’s Department of Economics, noted that the US’s ongoing trade war would not have a direct impact on Macau’s economy as the amount of the city’s merchandise trade is “very small” compared to the amount of its trade in services.
However, Kwan said, the US’s ongoing tariff war is expected to adversely impact the economic performances of various countries around the world, which would then reduce the spending power of visitors to Macau including those from the Chinese mainland, possibly leading to an indirect impact on Macau’s economy.
According to official figures, the US accounted for a mere 4.6 percent of Macau’s external merchandise trade in the first two months of this year. Shipments to the US accounted for only 1.4 percent of Macau’s total exports, while shipments from the US accounted for just 5.0 percent of Macau’s imports in January-February.
Imports accounted to 89.3 percent of Macau’s external merchandise trade in the first two months of the year, when re-exports accounted for 90.6 percent of Macau’s total exports.
Kwan Fung, assistant professor of the University of Macau’s (UM) Department of Economics, speaks to reporters on the UM campus yesterday. – Photo: Maria Cheang Ut Meng
