Macau is in a technical recession after gross domestic product (GDP) fell by 1.8 percent year-on-year in real terms in the second quarter and by 3.2 percent in the first quarter, according to figures released by the Statistics and Census Bureau (DSEC) on Friday.
It’s the first time since 2016 has the “R” word risen its ugly head again.
A technical recession is usually identified when real GDP falls year-on-year for two successive quarters. Customarily, a recession is a situation when demand is sluggish, real output is not rising, and unemployment is rising. A recession is not as severe as a depression. A DSEC statement said that “the economic downturn was mainly due to a year-on-year decline in gross fixed capital formation” (GFCF), which measures the net increase in fixed capital.
According to the statement, external demand continued to slow down – exports of gaming services fell by 0.8 percent and exports of goods dropped by 24.4 percent. Domestic demand decreased by 6.1 percent, dragged down by a 25.0 percent year-on-year drop in GFCF.
