Macau: economic diversification is inevitable, authorities say

Lei Wai Nong spoke at the Legislative Assembly during his 2022 policy address.

Macau.- Lei Wai Nong, Macau’s Secretary for Economy and Finance, shared his views regarding the possibility of economic diversification in the city.

Speaking at the Legislative Assembly during his 2022 policy address, he said: “With the launch of the 14th National Five-Year Plan and the General Project for the Construction of the In-Depth Cooperation Zone between Guangdong and Macao in Hengqin, a fundamental period for accelerating the development of adequate diversification of Macau’s economy is provided.”

The gaming industry contributed more than half of the city’s US$54bn pre-pandemic GDP, provided employment opportunities for approximately 17 per cent of Macau’s 600,000 residents, and created 80 per cent of the local government’s tax revenue.  However, since the Covid-19 pandemic, authorities have repeatedly highlighted the importance of diversifying the economy as the pandemic showed the city’s dependence on gaming.

The 2022 policy address made little mention of the government’s plans for the city’s gaming industry, only stating that authorities will “improve the gaming industry-related legal diplomas” and the supervision procedures for the sector.

Lei Wai Nong stated: “Legal diplomas relating to the gaming sector will be improved, reinforcing the synergistic development between gaming and related non-gaming activities, in order to consolidate and strengthen the global competitiveness of Macau’s integrated tourism and leisure sectors.”

The government of Macau has recently predicted that GGR for 2022 will be MOP130bn (US$16.2bn), half that seen before the Covid-19 pandemic. Authorities forecast that the city will continue to run a fiscal deficit and will face “great uncertainty” amid the continuing impact of the pandemic.

In the budget plan, the government estimates that gaming tax income will reach MOP45.5bn in 2022. The government said it will use the city’s accumulated fiscal reserves to support expenditure on social welfare and public infrastructure projects. 

As for the tourism plan for 2022, Lei Wai Nong said that it will focus on enhancing the image of Macau as a safe and livable city. Authorities will also support the tourism industry and launch more tourism projects to revitalise the community economy.

In the first eight months of 2021, the number of tourists increased by 43.6 per cent year-on-year to 5.1 million, which is still far behind the nearly 40 million reported before the 2019 pandemic.