GGRAsia – New gaming licenses to boost Macau’s GDP in 2023: IMF
New gaming licenses to boost Macau’s GDP in 2023: IMF
The International Monetary Fund (IMF) expects Macau’s economy to continue to expand in the coming years, after an estimated 17% growth in 2021, “helped by the partial recovery of the gaming sector”. But, he warned, “it will take time before the economy returns to its pre-crisis level.”
The fund released a written statement on Sunday that offered the prediction in light of discussions last week between IMF officials and Macau officials.
Macau’s gross domestic product (GDP) is expected to grow by 15% in 2022, “driven by the gradual return of foreign tourists and the recovery of domestic demand”, the IMF said.
He added: “Spurred by increased investment related to the issuance of new gaming concessions and deeper integration with the Guangdong-Hong Kong-Macau Greater Bay Area, growth is expected to accelerate for reach 23% in 2023 before gradually converging towards its long-term potential. around 3.5% in the medium term.
Macau is currently revising its gaming legislative framework, as an issue related to a new public bidding process for Macau gaming rights associated with the expiration of current licenses in June this year. Members of the Legislative Assembly of Macau approved monday the first reading of the bill supported by the government.
The IMF said Macau’s amended gambling law reform proposal “addressed a number of investor concerns, but some uncertainty remains.” He noted that tougher rules on the operations of junkets — and their marketing services in mainland China — “present risks to the prospects for the VIP segment of the market.”
The decline in Macau’s junket sector coincided with several unforeseen events in the market. They included the closure of all Suncity Group VIP rooms in the city, after the brand’s founder, Alvin Chau Cheok Wa, was arrested on November 27 on suspicion of having organization of illegal gambling for Chinese customers, including online gambling through the Philippines.
In its assessment of Macao’s macroeconomic situation, the IMF said that “given the scale of economic losses” during the Covid-19 pandemic, Macao’s level of GDP “is not expected to exceed its pre-COVID-19 level. crisis than in 2025”.
Although strong fiscal support from the Macau government and the financial strength of the city’s casino operators “have dampened employment and consumption, the sharp decline in activity” has exposed Macau’s “vulnerabilities to external forces affecting the influx of tourists,” the IMF said.
The institution pointed to some near-term risks to its outlook for Macau, including a “re-escalation of the pandemic” and increased “financial sector stress” in the city.
In its report, the IMF said the strength of Macau’s recovery “depends on a safe reopening” to tourists. Opening travel corridors between Macau and “other economies with high inoculation rates and low infection rates could accelerate the recovery of the gaming sector,” the fund said.
Mainland China remains the only place to have a largely free travel deal with Macau.