Macau’s economy is expected to resume growth in 2016

15 June 2015

The Macau economy is expected to start growing again in 2016, when the technical Economist Intelligence Unit predicts real growth of 5.3 percent, according to the most recent report on Macau.

After the GDP of the territory recorded a growth rate of 10.7 percent in 2013 and negative 0.4 percent in 2014, the EIU report for this year expects – 6.0 percent and a return to growth the following year.

The economic contractions registered, following consecutive years of strong growth, according to the report’s authors are due to the downturn in the gaming and associated services sector apparently as a result of anti-corruption measures adopted by the Chinese government.

Despite this decline domestic demand remains strong, as a result of a near full employment, which is why, according to the EIU, the economy will register a sharp drop this year and return to growth in 2016.

Gross fixed capital formation, or investment, is expected to fall this year to -2.0 percent, after increases of 8.9 percent and 35.2 percent in 2013 and 2014, respectively, and resume growth in 2016.

The expected decline in this indicator this year follows completion of major hotel and gaming developments,such as the 2nd phase of the recently opened Galaxy Entertainment complex and Broadway Macau, whose financial investment effort occurred precisely in 2014.

The inflation rate is expected to slow to 4.0 percent this year and 4.9 percent in 2016 after 5.5 percent and 6.1 percent in 2013 and 2014, respectively, due to a drop in the number of visitors, which resulted in reduced pressure on services and a downturn in luxury goods purchases, such as gold items, watches, bags and branded apparel. (macauhub/MO)