The International Monetary Fund (IMF) revised its economic growth forecast for Macau in 2017 upwards from 0.2% to 2.8%, according to a report released on Wednesday in Washington containing the conclusions of the consultation under Article IV (http://www.imf.org/en/News/Articles/2017/02/14/PR1748-Macao-IMF-Executive-Board-Concludes-2016-Article-IV-Consultation).
The IMF team that visited Macau for 12 days concluded that the economic situation of the Macau Special Administrative Region (MSAR) is recovering and forecast that the economy will grow steadily.
The IMF acknowledges in its report that Macau has no public debt, and rather has a large financial reserve and that its net assets reached 280% of GDP at the end of 2015, so therefore “this scenario will continue to support the MSAR to achieve its objectives for development of the economic model of the economy into a more modern and diversified model.”
The IMF staff, who remained in Macau from 3 to 14 November 2016, restated its support for the joint exchange rate system between the pataca and Hong Kong dollar and confirmed the importance of this system for Macau. Furthermore it stated that the success of the system is due to the implementation of a number of necessary support policies – strong foreign exchange reserves, a flexible banking system with sufficient capital, prudent public financial policy and a flexible market in terms of human resources.
The IMF also praised the MSAR for having a stable and competent financial sector, a prudent supervisory mechanism, and financial stability indicators related to asset quality, strong liquidity and income.
Macau still has the capacity to control the impacts of an economic downturn, its rate of bad debt rate or overdue for more than 90 days remains at about 0.1% of loans and the tourism sector shows good performance. (macauhub)