Photo: Luís Almoster

Stagnation until 2024?

If the IMF does not change its forecasts, Macau’s economy will be stagnant from 2019 until at least 2024. It would be the longest period of economic stagnation since the MSAR was created. As for being the richest place in the world, you will need to wait. 

MB Jan 2020 Special Report | IMF: from glory to recession

The last IMF World Economic Outlook brought a lot of news to Macau – none good. 

The one that had the most impact was the slowdown in economic growth, while others went unnoticed. 

One of them tells us that, according to this October forecast, Macau will not only not be the richest place in the world by 2020, it will not be until at least 2024. 

Of course, as an IMF source tells Macau Business, the numbers, “indicate IMF staff estimates, which are updated at least twice a year following official data publication as well as the IMF Article IV consultation etc.” 

In other words, Macau’s GDP just needs to grow again and in the next update (April) we will already have different accounts. 

But for now these are in force and they show that by 2024 Macau’s economy will be stagnant. 

This year GDP per capita (in Purchasing power parity, PPP) will be $115.447 million, slightly lower than in 2018 (§115,913) *. 

That is, based on this latest IMF forecast, Macau’s economy will not grow over the next five years, more than it grew two years ago. 

If we consider 2019, whose figures were below those of2018, it will be at least six years of economic stagnation, since increases, when allowed by the IMF (from 2021 to 2022, for example), are almost irrelevant. 

Without the cooling detected in the first half of 2019, Macau was set to enter 2020 as the richest place on planet earth (always using this GDP per capita criterion, measured in PPP). 

But for that, the GDP would have to reach §143,116 million, to surpass Qatar. 

However, not only will Qatar, according to IMF forecasts, continue to grow slightly every year until 2024 (even despite the regional embargo decreed by some neighbours), but Macau will lose weight by 2020 – see comparative table on these pages. 

As Macau will be stagnant to the limit of the IMF forecast and Qatar will add value to its GDP, the divergence will lead the two territories to be separated by about £ 50 million by 2024. 

The stagnation will have yet another, especially symbolic, consequence: If by 2020 Macau is only behind Qatar in terms of its GDP per capita (PPP) value, next year Luxembourg will take that place and in 2023 it will be Singapore’s turn to take a place on the IMF podium. 

In a word: Between the two IMF reports, Macau goes from the richest place to the 4th richest, ‘threatened’ – but at some distance – by Ireland. There are only four locations in the world with a GDP per capita (PPP) of over $ 100 million. 

Qatar, on the other hand, appears to be the only place in the world where a per capita GDP / PPP of up to $ 200 million is possible. 

*  Several other criteria used by the IMF confirm at least six years of stagnation. This is the case of Gross Domestic Product measured at constant prices in national currency: MOP418.847 billion in 2024, lower than the MOP424.895billion of 2018 and even the MOP419.285 billion that the IMF predicted for 2019. 

Miss 2013 

GDP per capita (PPP based) is gross domestic product converted to international dollars using purchasing power parity rates and divided by total population. 

This is a criterion used by the most responsible entities, starting with the World Bank and the IMF. 

In Macau, however, DSEC understands that this is not a relevant economic indicator, “and thus such data are not available,” they explained to Macau Business. 

Via World Bank data, we learned that GDP per capita PPP in Macau averaged 71556.79 USD from 1990 until 2018, reaching an all-time high of 134960.10 USD in 2013 and a record low of 40380.40 USD in 1990 (an international dollar has the same purchasing power over GDP as a U.S. dollar has in the United States).