Moody’s Release Dim Forecast For Macau
The story of declining gambling revenues in the world’s largest gaming hub Macau has been well documented by our team. With over 24 consecutive months of declining revenues the forecasts for the former Portuguese colony are not looking to good according to Moody’s Investors Service who are forecasting difficult times for at least the next three years.
According to Moody’s Macau will see a 6 percent contraction year-on-year. Macau’s credit rating has been cut by a grade to Aa3 and has been assigned a negative outlook. Moody’s said,” We expect the economy will continue to contract during 2016 and 2017, although the pace of decline may ease. While the government has tried to diversify the economy, “strategies center primarily around broadening Macau’s gaming and tourism market, leaving growth volatile and susceptible to shifts in external demand.”
More worrying signs were the drop in accumulated casino GGR for the first five months by 11.9% to $11.5 billion from the same time last year. May saw gaming revenues drop by 9.6 percent from the same period last year and rounding off 24 moths of consecutive drops. On the positive side Moody did point out that despite the declines in revenues the overall Macau fiscal position which is still primarily driven by gaming revenues remains strong and will continue to post surpluses in 2017.