News Analysis: Macao’s Economy to Grow Fast

Spread the love

Macao’s economy will hopefully expand on a fast track this year on the back of robust tourism business, rise of tax revenues from casinos and picking-up exports, economists and government authorities have agreed.

The gross domestic product (GDP) of Macao is expected to grow 5percent or more in 2002 in an optimistic estimate from Chief Executive Edmund Ho Hau Wah, who is now visiting Inner Mongolia.


Ho noted there that “Macao’s economy has entered a period of embryonic recovery, compared with negative and zero increase before it returned to the motherland, thanks to strong support from the central government and social stability.”


Lao Pun Lap, president of the Macao Society of Economics Study,is also upbeat. “The economy could increase by nearly 6 percent in the whole year unless there were sudden changes in the outside world in the second half,” he said Friday.


Tourist arrivals in the special administrative region (SAR) went up a year-on-year 9.3 percent to 5.48 million in the first half of this year, helped by streamlined UFABet procedures for China’s inlanders to visit Macao and Hong Kong and a much higher number of travel agencies entrusted to manage the SAR-bound tours.


The increase of inland tourists was eye-catching, soaring 37.5 percent to 1.87 million. And they were the most generous group, spending money almost doubling that of tourists from other places.


The Macao Government Tourist Office is seeking to make tourists stay longer and spend more as the number of same-day visitors reached more than 2.3 million or 42 percent of the total in the first six months of the year.


As a result of encouraging casino performance, the SAR government raked in 3.45 billion patacas (431.25 million US dollars) in tax revenues from gambling sites from January to June,up as much as 19.1 percent.


The boom was due to tax increase demanded by the government after it announced the liberalization of gaming industry as well as more gamblers visiting Macao.


Lao foresaw gambling tax income would reach as much as seven billion patacas (875 million dollars) this year.


Fifty-five percent of Macao’s GDP was contributed by the gaming industry, while the ratio will probably rise to 60 percent this year, the economist said, adding this demonstrates that the strategy of “developing Macao’s economy with the gaming industry as dragon-head” set by the SAR government has been “so far, so good.”


Another engine for economic growth, the SAR’s exports have started to pick up amid a moderate worldwide economic recovery. Export goods climbed slightly to 6.68 billion patacas (835 million dollars) in the first five months. This reflected a 21.2 percent leap in re-exports against a 4.9 percent drop in local-product exports.


Exports of textile products and adult clothing rose 3.1 percent to account for 81.5 percent of the total, compared with a 10 percent drop in non-textile products including machinery and spare parts and footwear, according to the Statistics and Census Services.


The United States and European Union remained the city’s major export markets by absorbing 69.3 and 23.1 percent respectively of Macao’s exports, but the value of goods sold to the EU fell 12.7 percent, the sources said.


The economic data are good in general. However, in Inner Mongolia, Chief Executive Edmund Ho said Thursday that the service industry will fuel the Macao economy, but cannot help ease unemployment strains in the manufacturing and construction industries.


The jobless rate has been lingering at slightly above 6 percent.”Though the SAR government poured mounting resources into training for workers, the unemployed cannot catch up with the pace of new economic expansion,” Edmund Ho said.


Lao Pun Lap, a well-known economist, also warned that the gap between the rich and the poor is widening. He urged the government to allot resources more rationally, diversify industries and sharpen the competitive edge of the entire region and economy.