Macau’s strong economic growth is predicted to continue in the near term, with Gross Domestic Product seen growing by 13.9% in 2024 due mainly to the ongoing recovery of the gaming industry, according to a report from the International Monetary Fund (IMF).
The report, which concludes the fund’s Article IV consultation discussions with the Macau SAR, says a pickup in private investments will also contribute to growth, in part due to commitments from gaming concessionaires to invest in non-gaming sectors. It also expects the Macau government’s account balance to quickly return to pre-pandemic levels on the return of tourists.
“Economic growth is expected to remain strong in the near term,” the IMF said. “Further recovery of the gaming sector and increased investment in non-gaming sectors underpin growth in the near term.”
However, it also encouraged recent moves to diversify the economy, describing Macau’s reliance on gaming as an “economic vulnerability”.
“Macau SAR’s high growth volatility due to its heavy dependence on the gaming sector was amplified by the pandemic,” it said. “To address the macrostructural challenges stemming from Macau SAR’s overreliance on tourism, small population and limited land, the authorities stepped up their efforts to facilitate economic diversification through tax incentives and subsidies.
“Economy-wide structural reforms that improve efficiency and resource allocation should be a key pillar of Macau SAR’s diversification agenda. The focus should be on incentivizing R&D and innovation, upskilling and reskilling the labor force, and streamlining labor and business regulations.”
RelatedPosts
