The International Monetary Fund (IMF) forecasts that Macau’s economy will slow this year to 3.3%, as a result of lower activity in the gaming sector and the continuation of high interest rates.
Macau’s Gross Domestic Product (GDP) grew 4.7% in real terms in 2025, reaching a preliminary value of approximately 417.28 billion patacas (43 billion euros), according to data released by the Statistics and Census Service (DSEC) of the Macau Special Administrative Region (MSAR).
According to the statement from the IMF’s annual Article IV mission, released this Wednesday, over the medium term, the MSAR economy’s growth is expected to slow “further, to 3%, in line with the projected slowdown in growth in mainland China and the Hong Kong SAR.” In an April report from the fund, the Washington-based institution cut its 2026 GDP growth forecast to 3.1%, two tenths of a point below the estimate now indicated.
The economic slowdown, the preliminary annual report now states, should be “partially offset by a recovery in investment growth,” mainly associated with the commitment by Macau’s six gaming concessionaires to invest in non-gaming sectors, the statement notes.
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The IMF also forecasts that the territory’s inflation will gradually increase in 2026 due to higher energy prices and will stabilize at 2.2% over the medium term, as economic slack diminishes and the negative effect of lower import prices from mainland China dissipates.
Macau’s annual inflation rate in 2025 stood at 0.33%, the lowest figure recorded in the past four years. In its April report, the fund had forecast that consumer prices would rise 1.8% in 2026, in a relatively moderate inflation environment. The fund emphasizes that the Macau SAR economy has remained resilient amid growing global uncertainty, supported by a strong recovery in gaming and tourism activities.
However, it cautions, real GDP remains below pre-pandemic levels and “the economy remains heavily concentrated in the gaming sector and tourism from mainland China.” The report reiterates previous diagnoses, namely the weight of an aging population and low demographic growth on labor supply and potential growth, while also generating fiscal costs.
The financial system “is well capitalized and has liquidity,” although non-performing loans remain elevated. “Fiscal policy can support the short-term recovery while addressing long-term structural issues through increased spending on infrastructure, healthcare and social benefits,” the fund suggests.
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“Continuing to safeguard financial stability and further accelerating economic diversification will be important to strengthen resilience and support more balanced and sustainable growth,” it concludes.
Still within the framework of its assessment of the current moment, the IMF notes that Macau’s economy continues to recover, despite headwinds stemming from the conflict in the Middle East. “The external and fiscal positions remain solid, supported by the robust recovery in gaming revenues and conservative expenditure execution,” the statement emphasizes.
However, domestic demand and private investment have been held back by still-restrictive credit conditions, heightened uncertainty, a stagnant real estate sector and underexecution of public spending.
Despite recent signs of stabilization, downward pressure on residential and commercial property prices persists, amid moderate investor confidence. The local small and medium-sized enterprise (SME) sector also continues to face difficulties, since the recovery in tourist arrivals has not translated into broad-based demand.
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Regarding the economy’s performance over the course of the current year, based on the pace of revenue collection and historical spending execution, the IMF considers it “likely that both gaming and non-gaming revenues will exceed budgetary estimates, while spending will likely fall short of budgeted levels.”
In this sense, the report indicates that, if this pattern persists, “fiscal policy in 2026 will be less accommodative than initially anticipated, with the revenue increase translating mainly into greater accumulation of fiscal reserves.”
In this context, the fund recommends increased efforts to ensure the timely execution of planned spending, considering that this “will be essential to maintain the necessary support, particularly in the areas of aging-related social assistance programs and capital investment.”
“Consideration should be given to further increasing budgetary spending, in line with the stronger revenue performance, if feasible,” it adds.
