February’s inflation will be below 2 per cent

I wrote a few days ago that inflation in 2017 could be between 2.19 and 2.55 percentage points, and in a worst-case scenario, if real estate and gaming grow at double-digits, it could reach values of around 2.66 per cent. I also said that it was natural for inflation to come down until May and […]

I wrote a few days ago that inflation in 2017 could be between 2.19 and 2.55 percentage points, and in a worst-case scenario, if real estate and gaming grow at double-digits, it could reach values of around 2.66 per cent.
I also said that it was natural for inflation to come down until May and then start climbing again in the following months.
In January 2017, according to the most recent DSEC information, Macau’s inflation went from 2.37 percentage points (Dec 2016) to 2.2 per cent (annualized change).
This confirms what I stated before.
Inflation has begun to descend! Although, curiously, we had an absolute monthly growth of the price index, which was only surpassed by that of October 2015.
In February, inflation will continue to fall to below 2 per cent, probably between 1.95 and 1.98 per cent.
Lower values than these were last seen in September 2010.
Of course I’m talking about the average change in the last twelve months (annualized change).
So, we will stay below the 2 per cent level in February.
But do not rub your hands together in glee, for after a few months of falling, inflation will start to rebound again in around June, and will then rise above the 2 per cent mark.
Believe me!
Who will be the bad guys in this situation?
The “good guy” will be the way the index is built, with the weights used for the 11 sections, although this index does not impress me, in that I am not sure it really translates the effective inflation rate.
The “bad guys” of the party, that is, those who are always more likely to push inflation up, will always be real estate and gaming and, of course, the mountains of visitors knocking on our door – more a consequence of gaming than an autonomous factor.
These are the ones who always drive up the famous “meals out of the house” category of the CPI.
Of course, tourists impact on other things too, because they trigger prices in almost every section where demand influences price growth, including hotels, taxi fares, supermarkets, hairdressers, etc.
Do not believe that prices only increase for our visitors, that our business community, involved in this type of business or others in their beards, is not xenophobic!
What this community does not like is to lose, even if only with beans, including losing business opportunities that knock on the door.
But as I usually say, let’s not leave this exercise of forecasting only to the witches!

Related

Latest