Fitch Predicts Macau Stable Fiscal Situation

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January 10, 2022
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Macau revenues directly depend on the demand for gambling. Given the dependence of the special administrative district (sar) from the changeable economic situation in china, the rating agency predicts a budget surplus in the amount of 9.5% of gdp in 2018.

Fitch predicts Macau stable fiscal situation

Experts believe that in 2019 the proof of budget surplus will be 9.4%. Based «more optimistic forecast», the predominance of the income of the gaming industry over costs will be «around 5%» next year.

According to fitch, the target surplus of the central budget of the government of macao for 2019 in the amount of $ 2.23 billion, or 4% of gdp, was «conservative enough», and this indicates a continuing stable fiscal situation.

As reported in fitch, sar fiscal reserves are equivalent to 136% of gdp, or about six times higher than scheduled costs for 2019.

According to fitch forecasts, the real growth of gdp by 4.6% in 2018 and 3% in 2019 «due to the expections of the slowdown of gambling activity in combination with a weak forecast of domestic demand».

According to the inspection bureau and the coordination of gambling (dicj), gross income from gambling (ggr) for 2018 at the end of november amounted to $ 34.25 billion (by 13.7% more than in the previous year), which, according to fitch, surpasses all expectations.

It is expected that future remand will be stimulated by several factors, including optimizing applications for trips from mainland china, as well as projects such as the hong kong bridge – zhuhai – macau, who opened in october.

«The mass market of games this year has grown rapidly, in accordance with the desire of the autoation that proveokes the instability of the vip-segment, but the dependence on vip players remains high – about 55% of the income of the entire gaming industry across the country», – reported in fitch.

Macau was raised to the level «aa» from «aa-» in february last year, when fitch geve a ggr growth forecast by 13% in 2018.

Recall: the government of macau announced that, according to preliminary estimates, about $ 11.28 billion direct taxes from gambling in 2019 will go into the treasury of the administrative district. The budget surplus for 12 months will be $ 2.23 billion.

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