Economy of Macau

Economy - overview: The economy of Macau is based largely on tourism (including gambling) and textile and fireworks manufacturing. Efforts to diversify have spawned other small industries - toys, artificial flowers, and electronics. The tourist sector has accounted for roughly 25% of GDP, and the clothing industry has provided about three-fourths of export earnings; the gambling industry probably represents over 40% of GDP. More than 8 million tourists visited Macau in 2000. Although the recent growth in gambling and tourism has been driven primarily by mainland Chinese, tourists from Hong Kong remain the most numerous. Recently, gang violence, a dark spot in the economy, has declined somewhat, to the benefit the tourism sector.

The casino industry, the linchpin of the economy, has been controlled by the Sociedade de Turismo e Diversoes de Macau (STDM) monopoly for the last 39 years. That will change in 2001 when casino licenses will be offered to other casino operators.

Macau depends on China for most of its food, fresh water, and energy imports. Japan and Hong Kong are the main suppliers of raw materials and capital goods. Output dropped 4% in 1998 and the economy remained weak in 1999. Macau reverted to Chinese administration on 20 December 1999. Gang violence, a dark spot in the economy, probably will be reduced in 2000 to the advantage of the tourism sector.

Over the longer term, the relocation of manufacturing operations from Macau to the neighboring Chinese province of Guangdong will extend to textiles and garment production as China's entry into the World Trade Organization (WTO) gives the mainland increased direct access to international markets. Mainland competition, along with the phasing out of Multi-Fiber Arrangement[?] (MFA) quotas, which provide a near guarantee of export markets, over the next few years, will eventually spell the end of Macau's low-end mass production of textiles, which comprise the bulk of the SAR's merchandise export earnings. The best opportunities may lie in providing services--shipping, finance, legal--to facilitate mainland exports through Macau to the rest of the world, and conversely inflows of goods and investment to the mainland. Tourism, building on current gambling tourism, is expected to be an important area of potential economic growth and foreign-exchange earnings.

GDP: purchasing power parity - $7.65 billion (1998 est.)

GDP - real growth rate: -4% (1998 est.)

GDP - per capita: purchasing power parity - $17,500 (1998 est.)

GDP - composition by sector:
agriculture: 1%
industry: 40%
services: 59% (1997)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): -3% (1999 est.)

Labor force: 281,117 (1998)

Labor force - by occupation: industry 31%, restaurants and hotels 28%, other services 41%

Unemployment rate: 6.9% (1999)

Budget:
revenues: $1.34 billion
expenditures: $1.34 billion, including capital expenditures of $260 million (1998 est.)

Industries: clothing, textiles, toys, electronics, footwear, tourism, gambling

Industrial production growth rate: NA%

Electricity - production: 1.34 billion kWh (1998)

Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 1.42 billion kWh (1998)

Electricity - exports: 1 million kWh (1998)

Electricity - imports: 175 million kWh (1998)

Agriculture - products: rice, vegetables

Exports: $1.7 billion (f.o.b., 1999)

Exports - commodities: textiles, clothing, toys, electronics, cement, footwear, machinery

Exports - partners: US 48%, EU 31%, Hong Kong 8%, China 7% (1998)

Imports: $1.5 billion (c.i.f., 1999)

Imports - commodities: raw materials, foodstuffs, capital goods, fuels, consumer goods

Imports - partners: China 33%, Hong Kong 24%, EU 11%, Taiwan 10%, Japan 8% (1998)

Debt - external: $1.7 billion (1997)

Economic aid - recipient: $NA

Currency: 1 pataca (P) = 100 avos

Exchange rates: patacas (P) per US$1 - 8.01 (January 2000), 7.99 (1999), 7.98 (1998), 7.99 (1997), 7.962 (1996), 8.034 (1993-95); note - linked to the Hong Kong dollar at the rate of 1.03 patacas per Hong Kong dollar

Fiscal year: calendar year

See also : Macau