The Macau government announced that it will implement austerity measures following official data revealing gaming revenues declined 35.5 percent year on year in August.
“All departments will implement retrenchment measures to control public expenditure starting from today,” the information bureau said in a statement, citing the Chief Executive’s Dispatch.
The government said it has rolled out a plan to save MOP1.4 billion through reducing government spending.
Measures include freezing five percent of budgeted expenditure particularly in the purchase of daily supplies, and 10 percent of budgeted investment plan in all government departments.
The government said this stricter financial measure will not affect social welfare, among other social development schemes.
“The stable financial situation and sound financial system enabled the Government to cope with any unexpected economic fluctuation.”
Gaming revenue in August fell to MOP18.62 billion, resulting in accumulated revenue for the eight months amounting to MOP158.88 billion.
The amount is lower than the government’s budget submitted to the Legislative Assembly in March. As stated, the government would need to introduce stricter financial measures if gaming revenue falls below MOP20 billion monthly.
In a note by Morgan Stanley Research, it said mass gaming seems to be stabilizing, “but several things keep us from turning positive.”
This includes the “risk of further clampdown (UnionPay and underground money transfer), continued shutdown of VIP rooms, limited room to cut costs further (even though 2Q surprised to the upside), and inability of new Cotai casinos to drive demand. Further regulatory uncertainty remains relating to smoking ban and license extension.”
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