Macau’s economy expected to expand 13 pct on average in 2011 and 2012, The Economist says

16 March 2011

London, United Kingdom, 16 March – The Macau economy is expected to see real average annual growth of 13 percent this year and in 2012, after in 2010 having posted growth of 25 percent, according to the March, 2011 edition of the Economist Intelligence Unit (EIU), of The Economist group.

Noting that in Macau over the last few years real rates of growth had been surprising, with the economy expanding at an average annual rate of 15.5 percent between 2003 and 2009, driven by the end of the casino gaming monopoly, the EIU said that after the recession at the end of 2008, beginning of 2009, the Macau economy had “come back to life,” growing at an average annual rate of 24 percent in the four quarters ending in September, 2010.

Forecasting real growth of 25 percent for 2010, the EIU expects that Macau’s economy will grow by 12 percent this year and 14 percent in 2012, provided that the gaming concession holders continue to invest and visitors from China continue to seek Macau out to test their luck.

The EIU also said that inflationary pressures would remain although they would relatively contained, but noted that this was out of Macau’s control as the territory does not have an agricultural sector and an increasingly small industrial sector and is thus dependent on the prices of what it imports, particularly from China.

After in the Consumer Prince Index posted year on year growth of 4.9 percent in January, the EIU expects inflation of 3.9 percent this year and 3.2 percent in 2012.

Finally, gross fixed capital formation, or investment, will see an end to the downturn seen in 2009 (32.3 percent less) and 2010 (28.3 percent less) and will return to growth. It is expected to rise by 8.9 percent in 2012. (macauhub)