Macau’s economic growth is expected to slow to 3.3 per cent in 2026 as weaker gaming activity and higher interest rates weigh on the city’s recovery, according to the International Monetary Fund (IMF).
The forecast, released following the IMF’s latest Article IV consultation mission, is lower than the 4.7 per cent real gross domestic product (GDP) growth recorded in 2025. The IMF noted that Macau’s economy grew 7.1 per cent year-on-year in the first quarter of 2026, supported by gaming and tourism. However, the organisation said the recovery remains uneven, with casino revenue still below pre-pandemic levels despite visitor arrivals exceeding previous highs.
Gaming revenue remains below pre-pandemic peak
The IMF said Macau’s gross gaming revenue (GGR) remains around 15 per cent below its pre-pandemic peak, reflecting ongoing structural changes in the casino sector. According to the report, the gap is linked to changes in the VIP gaming segment following tighter regulation, stronger anti-money laundering and counter-terrorism financing measures and shifts in consumer spending behaviour.
Recent forecasts indicate that July casino revenue may drop, even with signs of improvement following the FIFA World Cup. Citigroup recently forecast July GGR of MOP21.0 billion ($2.60 billion), down 5 per cent year-on-year, although daily revenue trends improved as the impact of the tournament eased.
IMF expects medium-term growth to slow further
The IMF expects Macau’s economic growth to ease further to around 3 per cent over the medium term. The organisation said the outlook reflects slower projected growth in mainland China and Hong Kong, Macau’s key source markets.
While increased investment by Macau’s six gaming concessionaires in non-gaming projects is expected to support economic activity, the IMF said it is unlikely to fully offset broader economic pressures.
Competition and external risks remain concerns
The IMF pointed out that increasing competition in the regional gaming industry poses a risk to Macau’s economy. The report states that this stronger competition might impact tourism demand and how much visitors spend. This adds pressure to an economy that is still heavily reliant on gaming. The organisation also pointed to geopolitical tensions, financial market volatility and continued weakness in Macau’s property sector as downside risks.
The warning follows a difficult period for the casino industry. In June, GGR fell 12.1 per cent year-on-year to MOP18.52 billion ($2.29 billion), the first monthly decline since January 2025. Analysts attributed much of the weakness to the expanded FIFA World Cup schedule, which diverted spending towards sports betting and other forms of entertainment.
Diversification remains a key priority
Despite efforts to broaden its economic base, Macau remains heavily reliant on gaming and tourism, particularly visitors from mainland China. The government aims to increase the contribution of non-gaming industries to 60 per cent of GDP by 2030 under its third five-year economic and social development plan.
The IMF said achieving that goal will require continued investment in infrastructure, skills development and talent attraction, as well as measures to improve the business environment. It also recommended expanding Macau’s non-gaming tax base to reduce reliance on casino tax revenue.
Gaming continues to dominate public finances
Gaming taxes reached MOP51.19 billion ($6.3 billion) in the first half of 2026, up 13.1 per cent year-on-year. Casino taxes accounted for about 86 per cent of total government revenue during the period.
Analysts expect gaming activity to improve gradually after the World Cup. However, the IMF stated that Macau’s future growth will rely more on economic diversification instead of returning to the fast casino-led expansion that occurred before the pandemic.
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