The European Union (EU) has praised the economic development of Macau but warned that the territory has failed in diversifying its economic structure and is struggling to find workers for all the jobs it has created.
“Gaming contributed increasingly to Macau’s GDP,” the EU said in its annual report on Macau.
The report says the government relies mainly on gaming tax for its fiscal income. Direct tax on gaming contributed to 81 percent of Macau’s fiscal revenue last year.
However, the rapid economic growth is stretching the labour market in the city.
One quarter of Macau’s total labour force was employed in gaming and entertainment related businesses last year. For most of the year, the unemployment rate was 1.8 percent, a figure perceived as full employment.
“Given the strong growth of the gaming sector in 2013, Macau struggled with inadequate human resources,” the EU said.
Macau’s economy achieved strong growth of 11.9 percent of gross domestic product last year, up from 9.1 percent in 2012, according to official data. This growth was mainly driven by strong exports of services relating to the gaming and tourism sectors.
Gaming revenue in Macau increased 18.6 percent to 360 billion patacas (US$45 billion) in 2013.
“Despite the government’s efforts, Macau’s economic structure has not significantly diversified over recent years,” the EU concluded.
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Analyst at Roth Capital Partners