OPINION – Welcome to the Horse of Good Fortune: Time to move on and forget 2019!

José Sales Marques – Economist

This Lunar New Year is starting auspiciously with the Horse of Fire galloping through the streets of Macau carrying record numbers of tourists for the festive season. According to MGTO, this region recorded 1.7 million visitor arrivals between 14 and 23 February, with the peak of 228 thousand on 19 February, benefiting from the extended Spring Festival holiday period in Mainland China. And, as government and private entities have put together a vast and entertaining programme of activities, going from the traditional numbers of lion dance and city parades to the high-tech drones and fireworks displays, those tourists must have felt rewarded by their unique Macau visitation experience. Likewise, small businesses have also shared their satisfaction with the media on their revenue increase during the period.

Nonetheless, there were some discreet comments from vendors that one unit of the famous “chu ba bao” (pork bun), traditionally devoured by food lovers on accounts of more than one, was now being shared by a few, not necessarily for dietary reasons. Tourist dollars are now much harder to fly from their pockets, that’s a fact, but huge volumes are compensating for lower average spending. Also, according to JP Morgan, GGR for the first 22 days of the month saw some MOP14.3 billion achieved, or a daily average of MOP650 million, the whole period having fallen short of the brokerage’s expectation.

Cautious optimism in growth projections

Those are the reasons for the “cautiously optimistic” forecast from some of the “usual suspects” in that field, namely the home-grown and highly regarded Macau Economic Association, which projects a 2–5% growth range for GDP in 2026. Fitch, on the other hand, expects a 4 per cent GDP growth for the year, with GGR reaching circa MOP260 billion, assuming the premium mass segment will remain resilient and visitation from Mainland China will be kept at a very high level, given the continuous support of Beijing’s visa policies towards the MSAR (GGR Asia, 12 February 2026). If there are no unforeseen external shocks, this region’s GDP will reach a global value between MOP426 billion and MOP439 billion, according to the MEA estimated growth range. In the best-case scenario it would have surpassed the 2019 GDP of MOP434.67 billion, a figure which became a kind of benchmark to Covid recovery.

Structural transformation beyond the 2019 benchmark

However, as much as it is worth as a popular reference, does it really matter as an analytical tool? Actually, 2019 was a bad year for Macau’s economy, with GDP dropping by 4.7 per cent, affected by the decline in investment — major gaming-related projects were completed and the Chui government didn’t invest much in its last year in office — of 20.1 per cent; and services export — the lifeblood of our economy — shrank by 8.9 per cent. GGR performance was also negative for the whole of the year, decreasing 3.4 per cent relative to 2018 to reach MOP292 billion, a monthly average of MOP24.3 billion.

In the meantime, the external and internal economic environment of this region went through dramatic changes. Three years of pandemic and recession left behind a huge economic and human cost. Moreover, new legal and regulatory frameworks were introduced to the gaming sector and a new licence concession period of ten years began on 1 January 2023, keeping the six players with new rules, namely by engaging each of them in urban revitalisation programmes and cultural projects. Junket operations became highly regulated and satellite casinos were closed down at the end of 2025.

Structural transformation beyond the 2019 benchmark

Furthermore, development of the Macau-Guangdong Joint Cooperation Zone in Hengqin is of high priority, both as a regional and national development goal, with the MSAR investing largely under the 2024–2027 Development Plan for Moderate Economic Diversification to attract more local residents and businesses into the area.

Last but not least, the introduction of policies to foster mobility between Macau and the surrounding cities of the Greater Bay Area has opened new opportunities for Macau residents to “move north”, accessing new markets for goods and services that are relatively more competitive and diversified than those existing in this region, with significant negative impacts on local businesses. Due to Macau’s strong dependence on the Mainland China market for tourists and the favourable policies offered by the central government to this region, it has so far been insulated from major uncertainties of international markets.

Therefore, under this large picture of a changing local and international environment, how useful would it be to compare 2019 and 2025? For that purpose, a structural analysis of some of GDP’s components, from the expenditure approach, is provided in Table 1.

Table 1- GDP structure 2025 & 2019 (some components). Unit MOP(million) and %.

Year | GDP | Private consumption | Gross Fixed Capital Formation | Services Export (Xs) | Services Import (Ms) | Xs-Ms
2025 | 415,317 | 125,537 [30%] | 51,153 [12.3%] | 343,352 [82.7%] | 57,362 [13.8%] | 285,990 [68.8%]
2019 | 463,734 | 115,169 [24.8%] | 66,867 [14.4%] | 360,319 [77.7%] | 45,637 [9.8%] | 314,682 [67.8%]

Source: https://www.dsec.gov.mo/ts/#!/step2/PredefinedReport/pt-PT/45

The conclusion that one can draw from those figures is that Macau’s GDP structure changed somehow in the last six years, perhaps not exactly in the direction that most people would imagine. Particularly, “Services export” (tourist expenditure including gaming) was heavier in the GDP structure of 2025 (82.7%) than in 2019 (77.7%). Considering that the 2019 GGR was much higher than the one of 2025 (MOP292 billion vs MOP247.4 billion), the said result clearly indicates the rise of non-gaming as a structural element of Macau’s economy, a measure of an intra tourism/gaming industry diversification.

On the other hand, the above comparison also identifies a significant increase of private consumption in 2025 vis-à-vis 2019. “Go-north” consumption patterns have become an established one for residents, making that a rather surprising result. However, as this item includes final consumption of households and non-profit private institutions serving households in Macau and abroad (DSEC), those figures could indicate demographic change, on the one hand, as well as, on the other, an interesting and thought-provoking hypothesis: Macau residents’ “go-north” consumption behaviour might not be only about seeking better deals; the extra diversity and variety of consumption opportunities also increases the propensity to spend of locals in the nearby cities.

The economy of Macau SAR is undergoing profound transformation. These are structural changes that place serious challenges but also create significant opportunities for diversification and emerging new businesses. The trend is for further integration with Hengqin and the Greater Bay Area, with tourism and gaming, albeit in a state of adaptation to new regulatory and market needs

Integration and diversification in a changing economic landscape

A more thorough analysis of changing patterns on the economic structure of Macau for 2025 is still not feasible, since data pertaining to the excellent report by DSEC on the moderate diversification of the MSAR economy is only available in English until 2023, and in Chinese until 2024. Nevertheless, it is worth noting that the said report includes a chapter dedicated to “integration of Macau and Hengqin”. Under that chapter, it was reported that in 2023, Macau plus Hengqin Gross Value Added (GVA) amounted to RMB361.50 billion (approx. MOP401.91 billion, year-end exchange rate), with RMB3.8 billion pertaining to industries with Macau elements. Moreover, GVA of non-gaming activities in Macau plus Macau elements in the cooperation zone amounted to RMB197.85 billion (approx. MOP219.85 billion), representing over 62% of Macau GVA for that year.

Concluding, the economy of Macau SAR is undergoing profound transformation, some of which is not yet obvious. These are structural changes that place serious challenges but also create significant opportunities for diversification and emerging new businesses. The trend is for further integration with Hengqin and the Greater Bay Area, with tourism and gaming, albeit in a state of adaptation to new regulatory and market needs. This year of the Horse will be crucial for the future. On the one hand, the government will draw a new Five-Year Plan to align with China’s 15th Five-Year Plan (2026–2030) priorities. Among those priorities will be further integration in the Greater Bay Area, of which Macau-Hengqin are core elements. In this larger context, and if there are no surprises, by year-end Macau GDP will have reached the 2019 figure, but with much healthier fundamentals. Therefore, it has no meaning to keep on mentioning 2019 as a kind of benchmark, since GDP, as many will say, is just a figure, and what is important is what lies behind in its contents.