The International Monetary Fund (IMF) says it expects Macau’s “robust” economic growth to continue in 2024, boosted by investments pledged by the city’s six casino concessionaires.
The IMF issued a written statement on Wednesday describing its preliminary findings following an official visit to the city by its staff.
The fund estimates Macau’s gross domestic product (GDP) will expand by 13.9 percent this year, “due to the further recovery in the gaming sector and solid private investments, partly linked to the commitment of gaming concessionaires to invest in non-gaming sectors”.
Macau’s GDP “is expected to regain its pre-pandemic level in 2025,” it added.
Under the 10-year concession contracts with the city’s government that came into place in January 2023, if Macau’s annual GGR reached or exceeded the MOP180-billion mark by 2027, the casino firms would have to increase by at least 20 percent their collective MOP108.7 billion non-gaming and overseas-marketing spending pledges.
As city-wide casino GGR for full-year 2023 exceeded MOP180 billion, the local casino operators have already flagged a 20-percent increase in their respective pledged non-gaming spending up to 2032.
Macau’s GDP went up by 86.4 percent year-on-year in real terms in the fourth quarter of 2023, and by 80.5 percent year-on-year in full-year 2023, according to official data.
In late February, Lei Wai Nong, the city’s Secretary for Economy and Finance, said Macau’s GDP is expected to grow by 10.3 percent this year.
In its Wednesday update, the IMF said that China’s relaxation of Covid-related travel restrictions in early 2023 “breathed life” into Macau’s “pandemic-hit economy”.
“The gaming sector witnessed a sharp rebound, though non-gaming sector’s performance was less impressive,” it observed.
The fund added: “With economic recovery, fiscal policy consolidated in 2023, driven by withdrawal of pandemic relief measures, higher gaming revenues, and under-execution of current spending.”
In the near term, stated the organisation, government policies “should focus on supporting the still incomplete recovery, strengthening financial stability, and deploying proactive policies to manage emerging financial risks”.
In the medium term, Macau’s priority should be to “facilitate the economy’s diversification” and “enhance its resilience to future shocks,” it states.
The IMF said the medium-term growth trajectory for Macau “hinges on the pace” of its integration within the project of the Guangdong-Hong Kong-Macau Greater Bay Area, “and the success of economic diversification efforts”.
Macau’s growth “is projected to converge to 3 percent over the medium term,” it added.
