People's Republic of China-Macao Special Administrative Region

In recent years, the Macao SAR economy contracted by a cumulative 30 percent due to a sharp fall in spending by gaming tourists from Mainland China. Spillovers to the rest of the economy were relatively contained with unemployment staying under 2 percent and asset quality in the financial sector unaffected. Nonetheless, the size and speed of the shock underscored the need to transition to a more diversified economic model going forward. Fortunately, Macao SAR is entering this transition from a position of strength with large fiscal and external buffers.