TY - BOOK ID - 84656041 TI - People’s Republic of China—Macao Special Administrative Region : Staff Report for the 2014 Article IV Consultation Discussions. PY - 2014 SN - 1498398855 1498309968 1498301053 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Economic development KW - International monetary fund KW - Development, Economic KW - Economic growth KW - Growth, Economic KW - Economic policy KW - Economics KW - Statics and dynamics (Social sciences) KW - Development economics KW - Resource curse KW - Macau (China : Special Administrative Region) KW - Aomen (China : Special Administrative Region) KW - Macao (China : Special Administrative Region) KW - Macau Special Administrative Region (China) KW - Aomen Tebie Xingzhengqu (China) KW - Região Administrativa Especial de Macau (China) KW - 澳门特别行政区 (China) KW - Macau KW - Economic conditions. KW - Banks and Banking KW - Finance: General KW - Financial Risk Management KW - Statistics KW - Industries: Financial Services KW - Macroeconomics KW - Money and Monetary Policy KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - General Financial Markets: Government Policy and Regulation KW - Data Collection and Data Estimation Methodology KW - Computer Programs: Other KW - Monetary Policy KW - Pension Funds KW - Non-bank Financial Institutions KW - Financial Instruments KW - Institutional Investors KW - Aggregate Factor Income Distribution KW - Banking KW - Finance KW - Econometrics & economic statistics KW - Monetary economics KW - Financial sector stability KW - International reserves KW - Commercial banks KW - External sector statistics KW - Financial sector policy and analysis KW - Central banks KW - Financial institutions KW - Income KW - National accounts KW - Credit KW - Money KW - Banks and banking KW - Financial services industry KW - Foreign exchange reserves KW - Economic statistics KW - Sovereign wealth funds KW - Macao Special Administrative Region, People's Republic of China UR - https://www.unicat.be/uniCat?func=search&query=sysid:84656041 AB - KEY MESSAGES Setting. Discussions took place for the first time since the handover of Macao SAR from Portugal to China in 1999. Prudent macroeconomic management has underpinned rapid development in the territory, which is now the world’s largest gaming center. As a small, open and tourism-dependent economy, Macao SAR is currently also benefiting from loose global monetary conditions and a Mainland-related boom. Outlook and risks. Growth should stay strong over the next few years at 8–10 percent buoyed by gaming exports and investment, with inflation remaining around 5–5½ percent. However, the economy is vulnerable to external shocks, in particular a slowdown in tourism, due to shocks in the Mainland or Hong Kong SAR or other setbacks to the global recovery. The buoyant property market could also correct if demand fundamentals shift or interest rates rise abruptly with the withdrawal of unconventional monetary policy abroad. Macroeconomic policies. The policy stance is appropriate, with scope for further tightening of macroprudential policies should property prices continue to rise sharply. If downside risks materialize, targeted fiscal stimulus should be used to buttress growth. In the event of a severe property downturn, some countervailing measures could be cautiously unwound. The currency board is the best arrangement for Macao SAR. Financial stability. Important progress has been made in strengthening financial stability in line with the 2011 FSAP recommendations. Prudential measures should focus on managing potential credit and liquidity risks from a gaming slowdown and the property sector, as well as spillovers from shocks in the Mainland and Hong Kong SAR. Longer term challenges. Looking further ahead, Macao SAR’s public finances face a moderation in gaming revenues juxtaposed against spending needs from population aging. A sovereign wealth fund to manage part of the territory’s fiscal reserves and medium-term budgeting could therefore be useful. As the gaming sector matures, economic diversification toward other services will be key for stable growth. ER -