Francis Tam cautious on economic growth: Macau GDP to grow at last year’s pace

2013-3-19

From：Macau Daily Times

Macau’s economy should “continue the pace of stable growth at one digit, similar to last year’s,” said Francis Tam yesterday, talking on the sidelines of the Monetary Authority’s Spring cocktail event.
Last year, GDP growth stood at 9.9 percent and the Secretary for Economy’s prediction was interpreted as “realistic to cautious” by observers.
Veteran economist Albano Martins told the Times, “he was being realistic, because the growth will be between one-high-digit to two-low-digits.” His own prediction was “up to a cap of 12-13 percent.”
Mr Martins supported his view by reference to the fundamentals. “Exports are growing, and more importantly investments will rise in 2013.” “New investments in the gaming sector have kick-started this year already, and that alone will bring more growth,” stated the economist.
What the Secretary was trying to convey, said Mr Martins, was perhaps this message: “Forget about the two-high-digit growth that we had in the past [before 2012].” At least until 2015-16 when new properties are due to open in Cotai, said the economist.
Macau development faces two major obstacles: human resources and inflation “which are very much related,” said Albano Martins.
The government “has to fully review the labor and immigration laws, because as it is now it’s strangling the gaming operators, as well as SME’s, because of the cannibalizing power of the former.”
Mr Martins supports a relaxation of labor imports as a measure “both to serve the needs of the corporations and to cool inflation.” High demand in the labor market leads to higher salaries which in turn “bring more inflationary pressure” to local consumers.
As for housing, Secretary Francis Tam also mentioned that “in conjunction with banks, the government will study whether it is worth following the example of Hong Kong and increase interest rates on housing loans, so as to cool the market.”
Mr Tam was confident that any decision would be based on the actual situation in Macau.
For the economist Albano Martins, other measures could be implemented to curb the situation, “like, for instance, increasing the reserve tax.” This means that the banks would have to limit their loans to “a lower percentage of their total assets.”

Copyright@Macau Daily Times