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The Executive Board of the International Monetary Fund (IMF) has concluded the Article IV consultation with the People’s Republic of China—Macau Special Administrative Region (SAR); concluding that Macau’s strong recovery and growth in the future is expected.
According to the report, Macau’s economy showed a robust recovery following the relaxation of Covid-19 measures in Mainland China, with real GDP rising by 80.5% in 2023. This surge was largely driven by an increase in services exports, along with strong growth in private consumption and public investments. However, the economic momentum slightly weakened towards the end of 2023, likely due to reduced private consumption in Mainland China. Despite this, inflation remained low at around 1%, partly due to falling rental prices. The current account balance also improved significantly, bolstered by the rebound in services exports.
The IMF expects continued strong growth for Macau moving forward. GDP is projected to increase by 13.9% in 2024, spurred by a recovery in the gaming sector and a rise in private investment, driven by commitments from gaming concessionaires to invest in non-gaming sectors. Inflation is expected to rise gradually, stabilising at around 2.5% over the medium term. With the anticipated return of tourists, the current account balance is forecast to return to pre-pandemic levels in the medium term.
However, there are several risks to this positive outlook. A sharper dwindle in Mainland China’s property sector and prolonged high interest rates in major economies pose short-term risks. Over the medium term, slower growth in Mainland China and more frequent extreme climate events could negatively impact Macau’s growth. Conversely, faster integration with the Greater Bay Area and successful diversification efforts could enhance economic growth.
The IMF’s assessment underscores the resilience of Macau’s economy and the importance of strategic investments and policy measures to sustain growth and stability.
