Experts foresee challenges to Macau’s economic growth in 2026

Experts contacted by Lusa foresee challenges to Macau’s economic growth in 2026, with the recovery of the gaming sector contrasting with weak domestic consumption and mounting pressure to diversify the economy.

Economist Henry Chun Kwok Lei, a professor of Business Economics at the University of Macau and vice-president of the Macau Economic Association, maintains a “cautiously optimistic” outlook for 2026, forecasting gross domestic product (GDP) growth of around 2.5 per cent next year.

Cautious optimism despite high gaming base

“The high base of gross gaming revenue this year, projected at between MOP 246 billion and MOP 248 billion, will limit growth potential in 2026. Even if casino revenue rises by about 4 per cent, to more than MOP 250 billion, its contribution to overall economic growth will decline,” Henry Lei told Lusa.

Ben Lee, a consultant specialising in the gaming industry in Southeast Asia, holds a more upbeat view. “Gross gaming revenue has already reached MOP 226.5 billion by November this year, so it is more than likely that we will exceed the projection of MOP 228 billion,” he said.

The estimate for gaming revenue in 2026, the analyst added, is “somewhat conservative”.

“Unless there is a reversal next year, based on current momentum, gross revenue could reach between MOP 260 billion and MOP 270 billion by the end of 2026,” he estimated.

The forecast included in the 2025 Budget pointed to total revenue of around MOP 240 billion, but a weak start to the year — particularly after the tariff war triggered by the United States — raised alarm within the economic team of Chief Executive Sam Hou Fai. In June, the government approved a revised budget cutting revenue projections by MOP 4.56 billion, which are highly dependent on the gaming sector (around 83 per cent of Macau’s GDP).

Growth outlook amid global uncertainty

The Macau Economic Association expects annual GDP growth in 2025 to be around 5.4 per cent, an estimate supported by the “stable and positive trend of key economic development indicators, the overall stable functioning of the fiscal and financial systems, and the maintenance of low unemployment rates”.

For next year, the association added, “Macau’s economy is expected to maintain a stable and positive trajectory”, although the global environment “continues to be characterised by interconnected turbulence and complexity”.

The government’s 2026 Budget, approved by the legislature on 19 December, points to a 3.5 per cent increase in Macau’s casino revenue next year, reaching MOP 236 billion, still the highest level since the pandemic.

Consumption and SME support remain key challenges

Other critical challenges facing Macau in 2026 include stimulating local consumption and supporting small and medium-sized enterprises (SMEs). Speaking to Lusa, Lei Choek Kuan, president of the Macau Industry and Commerce Federation, pointed to an “irreversible” shift in consumption patterns and stressed the importance of government support in helping businesses maintain confidence.

Economist Henry Lei argues for a deeper structural transformation that goes beyond subsidies, suggesting that local SMEs should seek differentiation and premium services — such as “improving after-sales service, developing creative cultural products and creating high-end culinary experiences” — to cater to a high-spending niche demographic, rather than competing on price with mainland China.