In consultation discussions with the SAR, the IMF’s executive board said that Macau had been “hit hard by the Covid-19 crisis”, with a 54% decline in gross domestic product in 2020 followed by an 18% expansion in 2021 “driven by the partial recovery of the gaming sector”.
The gradual return of foreign tourists and the recovery of domestic demand is expected to drive Macau’s continuing recovery this year, with GDP increasing by 15.5%, before the issuance of new gaming concessions contributes towards growth of 23% in 2023.
In March, Macau’s government announced that gaming licences in the SAR would be extended by six months, until the end of this year.
However, the IMF noted that the collapse of economic activity during the height of the pandemic, “mostly on account of weak services exports, highlighted Macao SAR’s overreliance on the gaming industry”.
Furthermore, “due to the still relatively low tourism receipts” and “in the absence of rapid progress towards economic diversification”, Macau’s current account surplus in 2021 was estimated to be less than half of what it was before the pandemic.
“Large downside risks remain,” the IMF stated. “A resurgence of the Covid‑19 pandemic could stall Macao SAR’s near‑term recovery and undermine the medium‑term viability of the gaming sector. “Some uncertainty remains regarding the proposed amendments to Macao’s gaming law, which in combination with the recent ban on the gaming services’ marketing in the mainland, clouds the outlook of the gaming sector.”