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Macau GDP to fall 16 percent in 2015: Fitch

Fitch Ratings expects Macau's economy to shrink by 16 percent year-on-year in real terms in 2015 after a 15Q2 GDP quarter-on-quarter decline of 6.4 percent.

Macau's 15Q2 decline, following a 12.4 percent fall in 15Q1, is a larger move than that factored into Fitch Ratings' forecast. 

“The contraction underscores the risks to Macao's economy from its heavy reliance on gaming revenues from Chinese visitors, and its vulnerability to shifts in mainland government policy. Gaming revenues have begun to stabilise in recent months, but the potential remains for substantial shifts to our forecasts - both on the upside and downside - with the evolving economic and policy conditions in China,” Fitch said in a press release.

Fitch expects Macao's gaming revenues to drop by about 30 percent in 2015.

“The feedthrough to the broader domestic economy has been limited, though, as the impact has mostly been absorbed by casino operators through narrowing margins. All major casinos have nevertheless remained profitable, and unemployment has stayed low as hotels have sought to retain staff in advance of new casino resort openings in 2016-2017.”


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