GDP-ish mood

Gross Domestic Product figures for the first quarter give us reason to be kind of blue (apologies to Miles Davis). When we would expect things to be picking up, two full years into the pandemic, the numbers are not only in the red – they appear to be getting a darker hue.

GDP was down nearly 9 per cent at current prices compared to the same period last year. The same figure one year earlier was close to minus one per cent, a comparatively insignificant number. Especially if we bear in mind that the denominator for the ratio then was the 2020 first-quarter GDP, which contained the last ‘normal’ month before the crisis.

The growth momentum seems totally lost for the moment. The recent Labour Day failed to meet expectations – again. It was another missed steppingstone in a long row of unfulfilled promises. Just as it was the case before with the Chinese New Year week; and the Christmas and New Year period before that – and we could go on through earlier periods that raised similar expectations that were not met.

The borders remain closed to most, if not all, foreigners. The flows from Hong Kong and Taiwan are yet to restart, and no clear path or schedule exists for that purpose. Until recently, the only source with a modicum of vitality was mainland China, albeit at a much-reduced level if compared with the standards set before the crisis. Even there, things appear to be changing for the worse, as various regional COVID outbreaks and lockdowns of varying intensity pop up. Further, there seems to be an active discouragement for people traveling.

Source: https://www.macaubusiness.com/opinion-gdp-ish-mood/