IMF predicts economy to grow by 4.3% in 2019

The economic growth rate of the Macau SAR was projected at 4.3% in 2019 and about 4.0% over the medium term, the Monetary Authority (AMM) said on Saturday, quoting a report from the International Monetary Fund (IMF).

The monetary watchdog said the IMF concluded the 2019 Article IV Consultation with the Macau SAR and published its staff report over the weekend.

The report affirms the region’s strong fiscal and external financial positions, credible linked exchange rate system, sound financial system, wide-ranging plans for economic diversification and prudent macroeconomic policies.

On the economic outlook, the IMF mission expects the SAR’s economy to achieve relatively stable and solid growth over the medium term, driven by tourism and continued diversification efforts.

The investigation also recognized the prudent macroeconomic policies of the SAR government leading to zero gross debt, which has endowed Macau with large fiscal and external financial buffers. These buffers will continuously anchor the stability of the economy and reduce external vulnerabilities emanating from global economic uncertainties.

On the external financial front, the SAR remains a net foreign creditor, driven by its sizable current account surplus and reserves as well as the external position of its banking sector. Macau’s ample net foreign assets will underpin its medium-term external solvency.

The report mentions Macau’s sound financial sector and welcomes the progress to strengthen its anti-money laundering and combating financing of terrorism framework. The financial soundness indicators regarding asset quality, earnings, and liquidity remain robust.

The current macroprudential regulations with respect to the real estate market appear broadly appropriate while systemic risks are largely contained, it added.

In addition, the IMF welcomed the incentives of the Monetary Authority of Macao in strengthening cross-border supervisory cooperation, which are deemed to facilitate the prevention of regulatory arbitrage and avoidance.


Professor Zeng Zhonglu of Macau Polytechnic Institute’s Gaming Teaching and Research Centre said he expects a slight increase in gambling revenue this year, following the International Monetary Fund’s forecast.

Zeng’s optimism echoes that of Professor Davis Fong, Director of Institute for the Study of Commercial Gaming of the University of Macau, who expressed his confidence in Macau’s 2019 gambling revenue early this year.

Fong voiced the expectation there would be a single-digit increase in overall gambling revenue, as he saw the 20th anniversary of the Macau Special Administrative Region and the opening of the Hong Kong-Zhuhai-Macau Bridge opportunities to drive in tourists.

Zeng considered the IMF’s forecast “relatively conservative, but basically reliable.” He said forecast for Macau’s economic growth for this year should be based on two foundations: the result of gambling revenue and the Chinese-America trade negotiation. Three out of the first four months of this year saw falls in gambling revenue, especially in VIP business. Zeng attributed this to the general smoking ban in casino, and expected normalcy after players became accustomed to it.

However, Zeng noted difficulty in predicting the effect on gambling revenue caused by the trade war between China and the U.S., especially as this ongoing issue might affect the global economy, which consequentially might affect tourist and consumption figures in Macau. Zeng noted that a slowed economic growth may not necessarily affect gambling revenue. MDT/Agencies

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