Inflation rate rises for the first time since August 2020

The composite consumer price index (CPI) in July rose by 0.38% year-on-year, the first year-on-year growth seen since August 2020, according to data from the Statistics and Census Service (DSEC).
The bureau indicated that the CPI for July stood at 102.53, attributing the slight increase to dearer charges for eating out and electricity, as well as higher prices of gasoline, Liquefied Petroleum Gas and fruit.
However, the rise was partially offset by lower rental costs for dwellings, the falling prices of pork, clothing and footwear, as well as decreasing charges for telecommunications services.
Local economist Albano Martins forecasted that August’s inflation rate will be -0.54%, adding, “if it doesn’t materialize, I believe it will be in the range -0.55% and -0.51%.”
“The problem is that we have had deflation since March last year and if we continue like this, we can [be expected to] continue in deflation (on average in the last 12 months) until November,” he told the Times.
“The year-on-year variation started to be positive in July, which is expected to continue to [be the case] if we don’t sink into recession. [A recession] is not to be expected given the very low values ​​of gross domestic product as of the second quarter of last year,” he added.
The composite CPI for July rose by 0.03% month-on-month, while the average composite CPI for the first seven months of 2021 dropped by 0.57% year-on-year.
The average CPI-A and CPI-B fell by 0.59% and 0.54% respectively. CPI-A relates to about 50% of households: those which have an average monthly expenditure of MOP12,000 to MOP35,999. The CPI-B relates to about 30% of households, namely those having an average monthly expenditure of MOP36,000 to MOP62,999.

MUST scholar expects rising CPI
A positive increase in the CPI for the remaining four months of the year will hopefully eventuate, Chair Prof. Jacky So Yuk Chow, vice president and dean of the School of Business at the Macau University of Science and Technology (MUST), estimated.
The rise of the July CPI, in So’s estimation, was mainly caused by the smaller price decrease of certain commodities. However, the academic noted that prices of food products should not see significant hikes as fresh products sold in Macau are mainly imported from mainland China with relatively stable supply.
On future prospects, he pointed to several major festivals in the coming months, such as the National Day holidays and Christmas, which are traditionally high consumption dates. He believes people will still have shopping sprees as a result.
In addition, “[there] is a lot of money in the market,” he said. The business studies academic reminds the government to issue financial support in accordance with the recovery of the economy to keep inflation in check. LV/AL