"Macao's official forecast of 7 percent year-on-year increase in gross domestic product (GDP) growth for the year 2004 is fairly reasonable," said Zhang Hongyi, general manager of the Bank of China Macao Branch (BOC Macao).

In an interview with Xinhua lately, Zhang said held an optimistic view on this year's GDP growth, "since Macao faces a favorable external environment and strong incentives for economic growth."

"Generally speaking, Macao's political and social status has remained stable since its return to China in 1999, which has created a favorable environment for an economic take-off," said Zhang.

He added that policies adopted by the young Macao Special Administrative Region (SAR) government since its inauguration in December 1999 have gradually taken effects in accelerating an economic recovery.

"The economy walked out of doldrums in 2002, when it entered a new round of growth period. The momentum was sustained and reinforced in 2003, when the official calculation of GDP growth was given at 15.6 percent," he added.

Considering the external environment, Macao's export markets inAmerica and Europe are back on track of a recovery. While, the SAR's adjacent markets in the mainland and Hong Kong can expect a stable growth in 2004, which would make for Macao's sustainable economic boom, Zhang said.

He continued, "Macao's economy is strongly geared up by a few incentives. The policy on opening up the gaming markets made by the SAR government in 2002 has started to bring in foreign investment and activate the foreign trade sector this year." In addition to this, the central government has approved three policies that would have an active effect on Macao's economy in the long run.

Firstly, he added, the mainland's facilitated individual travelon Hong Kong and Macao-bound tours in effect since July last year has already demonstrated its power in prospering Macao's tourism and its related sectors.

Secondly, he noted, the Mainland/Macao Closer Economic Partnership Arrangement (CEPA) implemented on January 1 is expected to have a significant impact on Macao's anticipating economic integration with the Pearl River Delta in the South Chinaregion, which will inject a great vigor to Macao's minitype-economy. As a policy framework, CEPA will have a long-lasting effect on boosting the market confidence rate and investment.

Thirdly, he said, Macao's upcoming launch of a cross-border industrial park with its adjacent Zhuhai City in south China's Guangdong Province would help solve worries on Macao's wavering advantage on textile exports accompanied with the removal of global export quota on textile products in 2005.

"However, there are still several negative factors on the economy, which are persistent and hard to overcome. The economy issmall in scale and heavily dependent on gaming and tourism. The lack of managerial and technical talents will impose a pinch on the fast economic growth in various sectors such as global finance,trade and tourism," said Zhang.

BOC Macao is the largest commercial bank in Macao. It is one ofthe two banknote printing banks in Macao, the Macao SAR government's treasury bank and the Hong Kong dollar settlement bank for the Macao Clearing House.

Source: Xinhua