EIU forecasts Macau’s economy to shrink 6 pct in 2015

26 March 2015

The Macau economy is expected to contract by 6.0 percent in 2015 and return to growth in 2016 with a rate of 5.3 percent, after ending 2014 with negative growth of 0.4 percent, according to forecasts from the Economist Intelligence Unit (EIU) for March of this year.

The EIU analysts explained the low economic growth in 2014 and the fall of Gross Domestic Product in 2015 with the anti-corruption campaign launched by the Chinese government, which led gross casino gaming revenue to fall for nine consecutive months.

The EIU expects the anti-corruption campaign will continue in 2015/2016 but said that revenue from casinos would tend to stabilise in mid 2015, before returning to growth, probably in the final quarter of the year.

The publication, to which Macauhub had access, noted that as the new tourist developments with casinos and hotels are completed in 2016 Macau’s economy will gradually begin to grow again.

The inflation rate will follow this downward movement of the economy, and declines of 6.1 percent in 2014 to 4 percent in 2016, will rise again in 2016 by 4.9 percent.

The EIU believes that the negative balance of trade seen since 2006 will continue but will record lower values ​​as in 2015 and 2016 it expects a slight increase in exports and local re-exports. (macauhub/MO)