Monetary Authority says economy to ‘adjust’ less in 2016

Pedestrians stand in front of a supermarket, left, and a BNU bank branch, right, under a residential building in Macau

In its Monetary and Financial Stability Review, the Monetary Authority of Macau (AMCM) has stated that “Macau’s economy would continue to adjust in 2016 but the adjustment would be ‘obviously’ less than 2015.”
The same report states that this financial forecast is based mainly “on a less gloomy expectation of the gaming sector”.
Another of the conclusions reached was that a “limited rise in the unemployment rate” could be expected.  However, the labor market at large is considered “robust” and has also been helped by a lowering of inflationary pressures due to the fall in property prices and, consequently, the rents.
The AMCM report states, in summary, that the growth outlook would gain traction in 2016 despite the existence of some challenging risk factors, such as the contraction of internal consumption due to “extra cautious” spending behavior by residents.  However, the possibility of a rise in interests rates, culminating in home mortgages becoming more expensive could threaten aggregate growth in the region.
As for the government’s accounts, they should continue to perform well with a fiscal surplus recorded in 2015 at MOP346.4 billion at end-October and should
sustain surpluses in 2016.
The AMCM also states that the government’s diversification strategy would help to nurture long-term economic development, which would include the diversification of the tourism sector and the cultivation of target industries.
The Monetary Authority says that developments in the financial sector, namely in services exports, could make these policies consistent with the plan to transform the MSAR into a “World Centre of Tourism and Leisure” and a “Commercial and Trade Cooperation Service Platform between mainland China and Portuguese-­speaking Countries.” RM