Macau: Economy expected to grow by 13 pct this year, Bank of China says

27 February 2008

Macau, China, 27 Aug – The growth of Macau’s economy is forecast at 13 percent as compared with 27 percent in 2007, according to a report from the Macau delegation of the Bank of China cited by Chinese news agency New China.

According to the report, the slowdown in world economic growth will “certainly” have an impact in Macau but, due to the dynamic development of the tourism and entertainment industries and increased investment in fixed assets Macau will maintain two-digit growth despite it being lower than in 2007.

So Chun Fai, the Assets and Responsibilities Manager at the Bank of China in Macau, said that the six casino operators not only contributed 29.3 billion patacas in direct gaming taxes, but also invested large amounts of capital in fixed assets, which in 2007 accounted for around 30 percent of Macau’s gross domestic product (GDP).

He added that as casino operators expand their activities in Macau, with the construction of more casinos, and a new round of investments in infrastructure, such as the light railway and natural gas projects, large amounts of funding would be injected into Macau’s economy along with investment in fixed assets.

Although it forecast two-digit growth for Macau’s economy, the report also focused on the diversification of the economy, which is currently dependent on gaming and gambling.

“it is undeniable that focusing the economy on a single industry brings great risk,” the report said.

Official figures showed that gaming and gambling taxes accounted for 70 percent of Macau’s tax revenues in 2007.

The report noted that it was important for the Macau government in 2008 to focus on diversifying the economy. (macauhub)