Macao SAR, China: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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, economy went into deficit in 2019 (-2.6% of GDP), due to decreases in revenue at casino concessionaries and then plummeted to -54% in 2020 due to the outbreak of the COVID-19, before recovering at +18% in 2021. The growth was again negative at -22.4% in 2022 but according to the updated 2023 IMF forecasts, GDP is expected to pick up to 56.7% in 2023 and 30.1% in 2024, subject to the post-pandemic global economic recovery.

The SAR's current account reached 15.2% of GDP in 2020 and 13.8% in 2021 but was negative in 2022 at -2.4%  (IMF, 2023). According to the latest World Economic Outlook of the IMF (2023), inflation fell to 0% in 2021 and reached 2.5% in 2022. It is expected to reach 2.4% in 2023, driven by housing, food, and energy prices. To counter its effects of inflation and redistribute the country's wealth, the government intends to pursue money transfers via the Wealth Partaking Scheme and lower taxation. Macau has benefited from the administration's prudent management of the economy, which aims at fiscal discipline and financial stability and providing a strong external position. 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. Macau recorded gross gaming revenue of MOP$42.2 billion (US$5.3 billion) in 2022, down 51.4% on 2021 and the lowest single year total since 2004 (Inside Asian Gaming, 2023). The government is trying to diversify the economy, particularly through tourism and recreation. The country is also facing to 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 of trade tensions between United States and Mainland China could significantly impact Macau economy, via a fall in tourism inflows from the Mainland.

Pre-COVID Macau was a flourishing territory where the unemployment rate remains among the lowest in the area (2.3% in 2020, IMF). Macau’s general unemployment rate for 2022 increased to 3%, its highest reported since 2009 and should stabilize at 2.5 and 2.7% in 2023 and 2024. Life expectancy is one of the highest in Asia (83 years). However, Caritas - one of the largest charities operating within Macau - estimates around 10% of the population lives in poverty and 7% struggles to meet basic food needs. The GDP per capita at USD 32 418  (CEIC, 2023) is not only nearly three times higher than the People's Republic of China, but it is also one of the highest globally. The territory is the most densely populated area in the world (20,164 people per sq. km) and there is a growing discontent related to immigration and escalating costs of living. Government officials are hand-picked by Chinese officials, creating potential disconnects between citizens and legislative decisions in the city.

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.

© eexpand, All Rights Reserved.
Latest Update: September 2023