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HONG KONG, July 16 (Reuters) - Macau's government will extend a lockdown of casinos and other businesses until Friday, as authorities grapple to stop the spread of COVID-19 in the world's biggest gambling hub, according a statement on its website.

The lockdown in the Chinese special administrative region had been due to end on Monday.

Macau imposed the shutdown last Monday, shuttering the city's economic engine - its casinos - and forbidding residents from leaving their apartments, except for essential activities such as grocery shopping.

Macau has recorded around 1,700 coronavirus infections since mid-June. More than 20,000 people are in mandatory quarantine as the government adheres to China's zero-COVID policy, which aims to stamp out all outbreaks, running counter to a global trend of trying to coexist with the virus.

More than 90% of Macau's 600,000 residents are fully vaccinated against COVID but this is the first time the city has had to grapple with the fast-spreading Omicron variant.

The former Portuguese colony has only one public hospital for its more than 600,000 residents, and its medical system was already stretched before the coronavirus outbreak.

Authorities have set up a makeshift hospital in a sports dome near the city's Las Vegas-style Cotai strip and have around 600 medical workers from the mainland assisting them.

In neighbouring Hong Kong, authorities are starting to loosen draconian coronavirus restrictions even as daily cases top 3,000, in a push to reboot the financial hub and its economy. (Reporting by Albee Zhang and Greg Torode; writing by Farah Master; Editing by Raju Gopalakrishnan and William Mallard)