GDP forecast to grow 15.5 pct this year
The Washington-based International Monetary Fund (IFM) has affirmed the Macau government’s “effective” deployment of fiscal resources to soften the COVID-19 pandemic’s adverse impact on the economy, the Macau Monetary Authority (AMCM) said in a statement yesterday.
According to the statement, the Washington-based global lender forecast that Macau’s economy will grow by 15.5 percent this year and 23.3 percent next year.
Macau’s quasi-central bank pointed out in its statement that the IMF has concluded the 2022 Article IV Consultation with the Macau Special Administrative Region (MSAR) and published its Staff Report yesterday.
According to the AMCM statement, the IMF Mission conducted the 2022 IMF Article IV Consultation from January 20-21 this year through virtual meetings with Macau Special Administrative Region (MSAR) officials, while the Staff Concluding Statement was published on January 24. The Staff Report, a more comprehensive assessment of the MSAR’s macroeconomic and financial positions, was released yesterday.
According to the AMCM statement, the IMF has affirmed the local government’s “strong policy response in containing the pandemic and the effective deployment of fiscal resources to soften its adverse impact on the economy.
“On economic outlook, the IMF expects that domestic demand and the revival of visitor arrivals will support the economy to grow by 15.5 percent this year.
“Underpinned by increased investments related to new gaming concessions and Macau’s further integration with the Guangdong-Hong Kong-Macau Greater Bay Area [GBA], the IMF forecasts the MSAR’s economic growth to accelerate to 23.3 percent next year while the long-term potential growth rate will be around 3.5 percent.
The AMCM statement also said that the IMF has indicated that the implementation of appropriate economic diversification policies will enhance Macau’s economic resilience.
“The IMF concurs that the MSAR’s economic diversification policies will enhance the economy’s resilience if implemented well.
“Meanwhile, it recommends a multi-dimensional approach in expanding the supply of skilled labour to advance economic diversification, increasing investments in information and communication technology infrastructure, promoting regional cooperation, and streamlining business regulations.
According to the statement, the IMF also recognises Macau’s efforts on promoting modern financial services, including the establishment of a central securities depository*, the launch of a cross-border “wealth management connect scheme” and the cooperation of financial institutions in launching the MSAR’s “Simple Pay” scheme.
In the course of promoting financial-sector development, the statement pointed out, the IMF underlined “that persistently strengthening the regulatory and supervisory framework of the financial sector is necessary to safeguard financial stability and integrity.”
The IMF also said that the local government’s measures on anti-money laundering and combating financing of terrorism are welcomed and should be reinforced constantly.
According to the statement, the IMF reaffirmed that the linked exchange rate system between the pataca and the Hong Kong dollar “underpins” Macau’s economic and financial stability, “attributable to the implementation of countercyclical fiscal policy as well as maintenance of adequate foreign exchange reserves, a robust banking sector and flexible labour market.”
The Staff Report is available on the IMF website. The next IMF Article IV Consultation with the MSAR will take place on the standard 24-month cycle, the statement pointed out.
* A central securities depository (CSD) is an entity which provides a central point for depositing financial instruments (“securities”), for example bonds and shares. – Source: ECSDA
