2016 Index of Economic Freedom


overall score70.1
world rank37
Rule of Law

Property Rights60.0

Freedom From Corruption49.7

Limited Government

Government Spending93.9

Fiscal Freedom73.1

Regulatory Efficiency

Business Freedom60.0

Labor Freedom50.0

Monetary Freedom69.6

Open Markets

Trade Freedom90.0

Investment Freedom85.0

Financial Freedom70.0

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Quick Facts
  • Population:
    • 0.6 million
  • GDP (PPP):
    • $80.8 billion
    • -0.4% growth
    • 13.7% 5-year compound annual growth
    • $139,220 per capita
  • Unemployment:
  • Inflation (CPI):
    • 6.0%
  • FDI Inflow:
    • $3.0 billion
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Macau has attracted significant investment since opening up its gaming industry in 2002. Ever-growing investment in resort and entertainment projects and related infrastructure has made Macau one of the world’s leading tourism destinations, with services accounting for almost 90 percent of GDP and over 70 percent of total employment.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 70.1 (down 0.2 point)
  • Economic Freedom Status: Mostly Free
  • Global Ranking: 37th
  • Regional Ranking: 9th in the Asia–Pacific Region
  • Notable Successes: Trade Freedom and Investment Freedom
  • Concerns: Corruption and Labor Freedom
  • Overall Score Change Since 2012: –1.7

As a Special Administrative Region of China, Macau largely maintains its own free-market economic structure. The rule of law is relatively well respected, though more effective anti-corruption measures are needed. More committed structural reforms are also needed to enhance prospects for broad-based long-term economic development.



Macau, colonized by the Portuguese in the 16th century, became a Special Administrative Region of China in 1999, and its chief executive is appointed by Beijing. Under China’s “one country, two systems” policy, Macau enjoys a high degree of autonomy except in matters of national defense and foreign policy. Macau is one of the world’s largest gaming centers and the only place in China where casinos are legal. Gaming-related taxes account for approximately 80 percent of government revenue. During 2014, Macau’s economy was negatively affected by China’s anti-corruption campaign and the mainland’s economic slowdown. Gaming revenues are down around 40 percent from the previous year. Two ongoing structural problems are a lack of tourist attractions for non-gamblers and high travel expenses.

Rule of LawView Methodology

Property Rights 60.0 Create a Graph using this measurement

Freedom From Corruption 49.7 Create a Graph using this measurement

The mainland Chinese government’s anti-graft campaign has led to a sharp decline in gambling revenue in Macau that has caused a sharp contraction in the economy. Macau has its own judicial system with a high court; the legal framework is based largely on Portuguese law. Private ownership of property and contractual rights are well established. There are no restrictions on foreign property ownership.

Limited GovernmentView Methodology

The top personal income tax rate is 12 percent, and the top corporate tax rate is 39 percent. Gambling tax revenues are quite high, and overall tax revenue equals 32 percent of GDP. Government spending is equivalent to 14.3 percent of total domestic output. Gambling revenue has outpaced the growth of public spending, generating considerable surpluses.

Regulatory EfficiencyView Methodology

The overall regulatory environment is less efficient than those of similar economies. License requirements vary by type of economic activity. The lack of a dynamic, broad-based labor market is caused partly by the absence of serious reform efforts. Monetary stability has been relatively well maintained, but government subsidies to households increased by nearly 50 percent in the first half of 2015 despite a severe economic downturn.

Open MarketsView Methodology

Macau has an average tariff rate of 0 percent. Non-tariff barriers are low and do not interfere significantly with trade. Most sectors of the economy are open to foreign investment. Foreign and domestic investors are generally treated equally under the law. The relatively small financial sector is dominated by banking and provides easy access to financing. Capital markets remain underdeveloped.

Country's Score Over Time

Bar Graph of Macau Economic Freedom Scores Over a Time Period

Country Comparisons

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Regional Ranking

rank country overall change
1Hong Kong88.6-1.0
3New Zealand81.6-0.5
7South Korea71.70.2
8Malaysia 71.50.7
10Brunei Darussalam67.3-1.6
11Thailand 63.91.5
17Sri Lanka59.91.3
19Kyrgyz Republic 59.6-1.7
26Pakistan 55.90.3
29Bangladesh 53.3-0.6
30Papua New Guinea53.20.1
37Solomon Islands470.0
42North Korea2.31.0
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