Economy | IMF predicts 61% growth, local economist believes otherwise

The International Monetary Fund (IMF) has predicted that the Macau SAR’s economy is expected to record a staggering growth of 61.2% year-on-year this 2021, after last year’s economy fell 56.3% due to the pandemic outbreak.
In the financial institution’s World Economic Outlook report, the city suffered the most significant decline of any economy in Asia.
The figure is also higher than its previous expectations, since it had earlier announced a forecast growth of 32% for 2021.
Previously, the IMF predicted that the economy was likely to contract by 52.3% in 2020, representing a dramatic update on the last predicted scenario which, in April 2020, pointed to a contraction of only 29.6%.
The local economy depends heavily on the city’s casinos, whose revenue was badly damaged last year, partly due to the 15-day lockdown in February 2020. Visitation restrictions on the mainland last year, which have made travel to Macau impractical for most people, was also a factor in the decline.
However, economist Albano Martins believed that the city may even see a recession this first quarter of the year, predicting a -10% plunge.
“If the gaming industry continues this way, we may see a growth, but not that size. [It could be] less than 20%,” Martins told the Times.
He admitted that economic forecasts are difficult to predict since the variables can change quickly.
“But [I’m] almost sure the IMF forecast may not be logical, as a recovery in second [half] may not change to more than triple,” he said.
The expert implied that the IMF may have based the forecasts on the recovery of the city’s gaming sector.
Macau’s gross gaming revenue last month totaled MOP8.31 billion, a record monthly high since the Covid-19 outbreak.
Brokerage JP Morgan said that the figure “bodes well for further recovery,” where the drivers could be the recent lifting of some gaming restrictions, which included scrapping the ban on standing bets and Covid-19 test requirements for casino entry.
However, some gaming experts have remarked that it is still too early to tell if the figure constitutes a recovery, sentiments Martins has echoed.
“I am being more cautious not expecting any big recovery as there are many clouds over the industry. So, [there] may be a recession in first quarter and no more than 20% growth all year,” Martins added.
The IMF’s projection for 2022, meanwhile, stands at 43% growth.