Economy expected to resume growth in 2016

A porter loads a suitcase onto a trolley in the lobby of the Galaxy Macau casino resort

The local economy is expected to start growing again in 2016, when the Economist Intelligence Unit has predicted real growth of 5.3 percent, according to the most recent report on  Macau.
After the Gross Domestic Product (GDP) of the territory recorded a growth rate of 10.7 percent in 2013 and negative 0.4 percent in 2014, the EIU report expects a decrease of 6.0 percent for this year and a return to growth the following year.
The economic contractions, following consecutive years of strong growth, 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, according to the report’s authors.
Despite this decline, domestic demand remains strong, as a result of a near-full employment rate, 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 will then 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 the Broadway Macau, whose financial investment effort occurred during 2014.
The inflation rate is expected to slow to 4.0 percent this year and 4.9 percent in 2016, following rates of 5.5 percent and 6.1 percent in 2013 and 2014 respectively, due to a drop in the number of visitors, which has resulted in reduced pressure on services and a downturn in luxury goods purchases, such as gold items, watches, bags and branded apparel. MDT/Macauhub