Macau’s economy has begun a process of “significant transition”, and the government has used the opportunity to adopt a less volatile economic model and more sustainable funding sources, said the International Monetary Fund (IMF), in a statement in Washington.
The IMF mission that was in the territory from 3 to 4 November, which will produce a full report within three months, said in the statement that the medium-term outlook remains strong, adding that Macau is well positioned to benefit from stable and sustainable growth on the lower scale of 1 per cent to 9 per cent.
“Although Macau’s economy will record a contraction for the third consecutive year in 2016, external demand started a recovery process with casino revenues positive for three consecutive months, as well as signs which demonstrate the existence of a more positive feeling from consumers over the past few months,” the document said.
The head of the IMF mission, Geoff Gottlieb, in these preliminary findings, praised Macau’s first five-year plan, presented this year, and said the local authorities “are correctly identifying the importance of diversification” of the gaming industry, tourism and the export of financial services.
The IMF Working Group agrees with the Macau government’s decision to establish a Sovereign Wealth Fund, as outlined in the Five-Year Development Plan (“Development and Investment Fund”), instead of improving the management of the Financial Reserve.
The decline in gambling revenues led Macau’s gross domestic product to fall 0.9 per cent in 2014, the first decline since 1999, the year in which the administration of the territory passed to China, by 20.3 per cent in 2015 and 10 3 per cent in the first half of 2016.