The fund released a report in which it details that it expects growth in Macau this year.
Macau.- The International Monetary Fund (IMF) has once again discussed the economy of Macau. This time, the fund said that growth is projected at 4.3% in 2019 and will likely remain solid over the medium term at about 4%.
The IMF said that the main driver of projected medium-term growth is tourism, with non-VIP tourism further expanding. It also said that there will be more subdued VIP gaming growth. According to the IMF, this is in line with Macau authorities’ diversification efforts towards more stable sources of growth.
This is part of the Article IV consultation discussions with Macao Special Administrative Region (SAR). This concluded on April 24, 2019, by the Executive Board of the International Monetary Fund.
Gaming tourism drives Macau’s growth
The IMF said that Macao SAR is the largest casino centre in the world and gaming tourism drives its growth. Executive directors commended the macroeconomic performance over the years, which has resulted in one of the highest per capita incomes in the world with zero public debt levels. “Directors indicated that prudent macroeconomic policies and high reserves provide strong buffers against shocks for Macao SAR. Though they noted that growth risks are tilted to the downside. Looking ahead, IMF Directors supported the Macau authorities’ efforts in enhancing growth resilience through diversification,” said the IMF.
“Directors saw the need for a comprehensive reform agenda to support fiscal policymaking. While acknowledging that the current balanced budget rule has been instrumental in maintaining prudent fiscal policy, they saw merit in an integrated medium/long‑term fiscal framework that could feature countercyclical fiscal policy, along with the planned Macao Investment and Development Fund (MIDF), managed and governed under international standards. Directors noted that such a framework will help increase efficiency in the use of fiscal reserves. It will also ensure that priority spending supports the diversification agenda and fosters inclusion, and help ensure long‑term fiscal sustainability and intergenerational equity in an ageing society.”
Directors welcome more supervision
Moreover, directors concurred that the financial sector remains sound with healthy liquidity and asset quality. They welcomed the steps taken to strengthen supervision and regulatory cooperation across jurisdictions.
“They commended the progress made by the authorities and agreed with the principle of diversification towards mass‑gaming and non‑gaming tourism and bolstering financial sector development,” the IMF added in the report that details Macau’s growth.