Published: 13.03.2020, 15:49
2 min read
Macau, a self-governing city located in China, is potentially facing a huge deficit in 2020 Gross Gaming Revenue (GGR). Jean Chen, the professor of Accounting and Finance at the University of Macau, predicts that the deficit could be up to MOP48 billion – which is roughly the equivalent of $5.99 billion.
Chen’s analysis matches that of Lei Wai Nong, the Secretary for Economy and Finance, who gave a deficit prediction last week.
The experts have spoken, and Macau’s economy has indeed taken a sharp turn for the worse. According to Secretary Lei, a deficit is normal when a country suffers from an emergency – such as the coronavirus, for instance. However, Lei also assured citizens that such deficits are usually temporary, and may not end up having a long-term impact on revenue.
Lei’s optimism is backed up by his steps to boost the local economy; for example, he ordered that Macau provide ever permanent resident with a check for 10,000 patacas – the equivalent of $1,250. Non-permanent residents also received a check from the government for 6,000 patacas, which is about $750. This money was to be used to help the residents withstand the economic impact of the coronavirus outbreak.
The Coronavirus is Affecting Casinos
Throughout all of this, resort-casinos faces a 15-day shutdown mandated by the government. This caused gaming revenue to drop in January, and then take a nosedive in February. Unfortunately, Macau’s casino revenue will probably get worse before it gets better; financial experts are speculating that the market will plummet even further as the coronavirus continues to spread. Various industries have been impacted by this epidemic, especially the tourism and service-based sectors – for instance, the retail, taxi, and tourism industries have been just as impacted as casinos, if not more. These industries have seen a massive drop of revenue – in some cases, up to 95%.
How Macau’s Government is Trying to Alleviate the Situation
Macau’s enterprise firms are entangled with the service industry; when one aspect drops, so does the other. Macau has been struggling to stay afloat during this time of strife, but, fortunately, the government is stepping in. When industries suffer, so do local residents. Macau’s city government has set multiple support plans in place; for instance, they are providing MOP2.2 billion (approximately $275 million) in individual vouchers. Furthermore, they are giving residents tax breaks and reductions, which should help significantly later in the year. One more measure they are taking is including credit guarantees for bank loans so that locals can afford to continue making payments on necessities. These are trying times, but the people of Macau are working together to alleviate their suffering.
