The University of Macau has revised its 2025 Macau economic growth forecast from 7 percent to 6.8 percent, citing the potential indirect impact of the trade war on tourism spending.
The projection was made by scholars from the University’s Center for Macau Studies and Department of Economics during their quarterly economic development seminar.
The downward adjustment reflects increased global economic uncertainty, particularly how US tariff policies could shrink global trade volume. While Macau’s goods trade volume is relatively small, limiting direct impact, a slowdown in major economies like China could indirectly affect Macau’s economy through declining tourist spending power.
This tourism spending reduction may occur as the 125 percent US tariff on China takes effect, given that the majority of Macau’s visitors come from the Greater Bay Area.
In 2024, according to the data reviewed by AGB, Macau welcomed 34,928,650 visitors, with 24,491,424 (70.1 percent) from mainland China. Among Chinese visitors, about 49 percent (11,985,383) came from the nine Pearl River Delta cities in the Greater Bay Area, representing 34.3 percent of total visitors.
The Greater Bay Area, with its concentration of manufacturing and export industries, could be hit harder by tariff policies than other regions in China. This situation could worsen as Macau’s tourism spending has already been struggling due to China’s weakened economy.
Tourism spending already showing signs of decline
According to the latest survey from the Statistics and Census Service (DSEC), per-capita non-gaming spending of visitors in Macau dropped by 14.6 percent year-on-year in 2024, amounting to MOP2,157 ($269).
Both overnight and same-day visitors recorded spending declines. Overnight visitors spent an average of MOP3,884 ($484), an 8.2 percent decrease, while same-day visitors spent MOP691 ($86), down 12.7 percent year-on-year.
Earlier this month, Vitaly Umansky, senior analyst at Seaport, indicated that China’s economic improvement, especially among upper middle class consumers, is key to driving upward growth in Macau.
In his projection, Macau’s gaming industry will see 6.5 percent growth in gross gaming revenue for 2025. Stronger growth is expected in the second half of the year, with projections of 10.9 percent growth compared to just 2.2 percent in the first half, reflecting anticipated economic recovery timing.
The estimated growth is closely tied to China’s economic policies and stimulus measures. According to Seaport, recent developments in China’s policy approach offer reasons for optimism. The Chinese government’s March announcement of a focus on boosting consumption and improving consumer confidence is seen as an important leading indicator of a strengthening China consumer and a driver of mass revenue growth in Macau.
Despite these positive indicators, China has not yet released any large-scale economic stimulus following the trade war escalation after April 2nd, the so-called “Liberation Day”, when Donald Trump announced reciprocal tariffs on over 60 countries.
Meanwhile, in Macau, Secretary for Economy and Finance Tai Kin Ip, due to the weakness of the gaming revenue recorded in the first quarter of this year, has warned that Macau’s fiscal revenue in 2025 might “not be as optimistic as expected,” emphasizing prudent financial management.
Concerns about US-funded gaming companies
When asked about the risks to US-funded gaming companies in Macau, Kwan Fung, Assistant Professor at the University of Macau, stated that any global trade conflict could prompt companies to re-evaluate their investment strategies. However, he emphasized that Macau’s economic fundamentals remain resilient, with the main risks are still concentrated in fluctuations in external demand.
The research team from the University of Macau also released forecasts for other key economic indicators which indicated that the local employment market is expected to remain stable despite the geopolitical uncertainties.
The research team projects that an overall unemployment rate in Macau will remain at a low 1.7 percent, with a local resident unemployment rate of 2.3 percent.
Meanwhile, service exports are projected to grow by 6.8 percent, private consumption expenditure is expected to increase by 3.8 percent, and the inflation rate is anticipated to remain low at 0.7 percent.
