SINGAPORE (Oct 22): In the International Monetary Fund’s October World Economic Outlook report, global growth was revised downwards by 0.2 percentage points for 2018 and 2019, to 3.7% for both years, compared with its forecast in April. One of the most dramatic revisions is for the Macao (Macau) Special Economic Region (SAR). Macau’s GDP growth was revised to 6.3% for 2018 and 2019, down from 7% in April. At any rate, the IMF expects Macau to overtake Qatar as the world’s richest country by per capita GDP by 2020 when its GDP per capita reaches US$143,116 ($197,078).

 The former Portuguese enclave, now an inalienable part of China, is the only region in China where gambling is allowed. According to The CIA World Factbook, in 2016, Macau’s gaming-related taxes accounted for more than 76% of total government revenue.

It appears that the US-China trade war initiated by the US, slowing Chinese growth and cautious spending could take a toll on the number of mainland visitors to Macau. During China’s Golden Week from Oct 1 to 7, total visitor arrivals grew 7.2% y-o-y to 895,000 while Chinese visitor arrivals grew 14% y-o-y to 735,000. However, the growth momentum faded towards the end of the week. “Despite decent traffic, sentiment turned sour after [the] growth rate dwindled in the final days of the Golden Week,” notes UOB Kay Hian in a recent report. “Through our conversations with operators, we learned that both mass and VIP rooms were quite packed. October 2018’s gross gaming revenue (GGR) should rebound to high single-digit growth, in our view, but would turn incrementally weaker in November-December,” the report adds.

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