GDP expected to contract 24 pct in 2015, EIU says

The Economist Intelligent Unit (EIU) has significantly increased its economic contraction forecast for the Macau economy in 2015 to 24 percent, according to a report produced on June 17.
In its previous report for this year, produced five days before on June 12, the EIU outlined a contraction forecast of just 6 percent. The EIU also increased its 2016 growth projection for the Macau economy from 5.3 percent in the June 12 report to 6.7 percent in the most recent report.
Predictions relating to gross fixed capital formation, or investment, also changed from one report to the next. While in the June 12 report the EIU predicted a contraction of 2.0 percent this year, and an increase of 8.4 percent in 2016, the report produced five days later expects declines in both years: down 3.7 percent this year, and 24.2 percent in 2016.
The EIU’s inflation rate forecasts were also revised, changed from 4.0 percent and 4.9 percent in 2015 and 2016 respectively, in the June 12 report, to 4.5 percent and 3.6 percent respectively, in the next report.
The EIU explained that this significant review of Macau’s figures for 2016 was based on the continued anti-corruption campaign in China. The campaign is having a significant effect on revenues from casinos, which are the main source of income for Macau, and this impact is expected to continue next year.
However, the EIU analysts expect an increase in casino revenues in the final few months of this year, albeit at a much lower level than previously seen, which explains the economic growth forecast for 2016.
The equally significant change in terms of gross fixed capital formation derives from an expected abrupt drop in private investment, as the hotel and casino complexes in the Cotai area are due to be completed.  MDT/Macauhub