The executive board of the International Monetary Fund (IMF) says “economic diversification holds the key to unlocking additional growth engines” for Macau.
While considering that Macau’s economic outlook “is bright”, the IMF executive directors warned that “over a longer horizon, growth could slow as the gaming sector matures and the population ages”.
The warning was included in IMF’s first review of Macau since the handover of the territory from Portugal to China in 1999. The IMF review was officially concluded on Thursday.
The IMF directors commended the Macau authorities’ focus on promoting non-gaming services, and encouraged them to explore more opportunities, including via broader integration with mainland China, further financial development and greater public investments in infrastructure and human capital.
“Prudential measures should focus on managing potential credit and liquidity risks from a gaming slowdown and the property sector,” added a report on Macau prepared by IMF staff as part of the fund’s review.
The document also urged Macau to introduce more anti-money laundering measures to safeguard integrity in the gaming sector, in particular to “bolster customer due diligence requirements” in line with international standards and “to strengthen oversight of all market players, including junket promoters and their associates”.
The report added that economic growth in Macau “is likely to remain robust, at 8 percent to 10 percent through 2017, on the back of gaming exports as the global economy strengthens and continued investment related to several casino expansion projects, including construction of hotels and large entertainment complexes”.
But it cautioned: “…the [Macau] government is heavily dependent on gaming revenues, which are volatile and will slow as the sector matures and faces greater competition from online gaming and other venues in Asia.”
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Chairman and chief executive of Philippine Amusement and Gaming Corp