Animal Farm | Predicting our inflation is not difficult!

Albano Martins

Predicting our inflation is the simplest thing in the world, provided you have minimal knowledge of these skills, of course. My model is simple and does not even require any econometrics.

A few days ago, before DSEC published its June inflation data, I wrote in a local newspaper that Macau’s annual inflation (as measured by the average change over the last twelve months) would be 3.03 percent or at most 3.04 percent in June.

It was 3.03 percent!

I also said that year on year inflation (June 2019 compared to June 2018) would be in the range of 2.59 to 2.68 per cent (or without such precision, 2.6 or 2.7 per cent). The y-o-y inflation was 2.62 per cent, or 2.6 per cent!

So, what will it be at the end of July?

The official numbers will only be known around August 22, but I already advanced my forecast to a local newspaper at the beginning of August. Inflation in July will be 2.98 percent!

At best it could be a hundredth of a percentage point below.

July’s y-o-y inflation will be between 2.56 and 2.73 per cent, or between 2.6 and 2.7 per cent if we do not want such precision.

See what I’ve been saying for several months already, that the Macau inflation would be for some months still above the 2018 (which was 3.01% as you may remember) and then start to come down.

See the trend: 3.01 in 2018, 3.11 in January 2019, 3.09 in February 2019, 3.10 in March 2019 and then 3.09 in April, 3.07 in May and 3.3 in June.

For the first time, it will begin to push down below the three percent barrier in July to 2.98 percent, although rounded this value is still three.

At the end of the year it is likely to fall further, but at around 2.9%, I mean, my forecast points to 2.93 percentage points by the end of 2019! Against the brains of this world!

Please note, IMF says it will be 2.5 percent and UMAC 3.1 percent, although it also says it could be 4.5 percent in the worst-case scenario and 1.5 percent in the best case! Anyway, there’s a whole world in the middle!

Last September I also said (Jornal Tribuna de Macau) that it could be at 3.9 percent!

Amazing.

The last EIU forecast I remember is 2.8 percent, the closest to my numbers.

Who will be closest to the truth? Guess who.