The Macau government has introduced austerity measures to prevent the city from slipping into a deficit, after its average monthly gaming revenue fell below the alert level of 20 billion patacas (US$2.51 billion).
The measures will affect an estimated 1.4 billion patacas of government spending, with no impact on welfare expenditure and funds earmarked for investment and development, the Hong Kong Economic Journal reported Wednesday.
Each government department will have to cut a range of expenses in its budget by 5-10 percent.
The measures were launched against the backdrop of a 26.4 percent plunge in economic growth during this year’s second quarter from the same period last year.
Actual economic conditions are not as bad as the gross domestic product figures suggest, since fiscal reserves remain healthy and the unemployment rate is low, said Ricardo Siu Chi-sen, an associate professor at the University of Macau.
Macau’s total gaming revenue for the first eight months of the year amounted to 158.88 billion patacas, translating to an average of 19.86 billion patacas per month.
The government has projected a fiscal deficit should the monthly average slide to 18 billion patacas or below.
SJM Holdings Ltd. (00880.HK) chief executive So Shu-fai urged the government to introduce stimulative measures to boost the gaming sector, such as expanding the individual traveler scheme for mainlanders.
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