Macao SAR, China: Economic Outline

Economic Indicators

A small open economy dependent on tourism and gambling, Macau is part of the People's Republic of China and has had the status of Special Administrative Region (SAR) since 1999. After some years of growth, the economy went into deficit in 2019 (-2.6% of GDP), due to decreases in revenue at casino concessionaires, and then plummeted to -54% in 2020 due to the outbreak of COVID-19. Macau's economy surged by 80.5% in 2023, reaching a per capita GDP of USD 69,700, as per preliminary data from the Statistics and Census Service. The notable growth, mainly fueled by the resurgence of tourism, propelled the GDP to 80% of the level achieved in 2019. The IMF expects the economy to expand by around 27.2% this year and 14.5% in 2025.

In the first 11 months of 2023, the government of Macao recorded a surplus of MOP 12.3 billion. This positive balance was primarily attributed to better-than-expected gaming tax revenue and significant spending cuts. Macao's six gaming concessionaires collectively contributed over MOP 59.5 billion in taxes during this period, according to recent figures from the Financial Services Bureau. Total current revenue from January to December reached MOP 77.2 billion, surpassing forecasts by about MOP 12 billion. However, capital revenue fell short by MOP 25.4 billion. Despite this, a substantial reduction in government spending offset the deficit, with total expenditure amounting to MOP 75.3 billion by November. According to the official budget for 2024, the surplus is expected to amount to MOP 1.17 billion, with revenue projected to reach MOP 107.11 billion. Official figures show that Macao's overall inflation rate averaged just 0.94% across 2023, dropping by 0.10% compared with 2022. The IMF forecasts an inflation rate of 1.7% in 2024 and 2025. The country's economy is still heavily dependent on the gambling industry, with the casino sector representing over 70% of Macau's tax revenue and employing one-fifth of the active workforce. The government is trying to diversify the economy, particularly through tourism and recreation. The country is also facing rising credit and rising property prices. China intends to promote Macau's economy, giving it concessions to build a new university and industries in the Chinese territory. Macau's heritage as a former Portuguese colony gives China the prospect that it could become a potential interface with Portuguese-speaking countries. To shed its reputation as a tax haven, Macau has signed transparency agreements with several countries. By contrast, worsening trade tensions between the United States and Mainland China could significantly impact Macau's economy, via a fall in tourism inflows from the Mainland.

In 2023, the general unemployment rate and the unemployment rate of local residents decreased by 1.0 and 1.4 percentage points year-on-year to 2.7% and 3.4%, respectively, following the gradual resumption of social and economic activities. Data from the Statistics and Census Service (DSEC) indicates that the median monthly employment earnings of the employed population and the employed residents were MOP 17,500 and MOP 20,000, respectively, marking an increase of MOP 2,500 and MOP 1,000 year-on-year. Analyzed by industry, employment in hotels, restaurants & similar activities increased by 2,100 to reach 49,000, while the education sector also saw a rise of 2,100, bringing the total to 20,900. However, employment in gaming & junket activities experienced a decrease of 3,600, falling to 67,400.

Monetary Indicators	2014	2015	2016	2018	2019
Macau Pataca (MOP) - Average Annual Exchange Rate For 1 GBP	13.14	12.20	10.79	10.77	10.13

Source: World Bank - Latest available data.

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Latest Update: May 2024