2016 / 2017 GDP and inflation

Forecasting is an “artistic” exercise that does not always go well.
A long time ago, a local university predicted the growth of Macau’s economy to be 18 per cent for 2012!
Well, it was not the only one to get this figure wrong.
For the same year, another renowned European institution advanced a growth of 15 per cent for Macau!
In fact, GDP grew 9.2 per cent in 2012!
Two weeks ago, I commented in a Portuguese newspaper, before Macau’s inflation figures for 2016 were released by DSEC, that there was a 99 per cent chance of inflation in Macau being 2.37 per cent in 2016!
Which is what happened, as we now know!
Interestingly, according to the same newspaper, on the same day DSEC disclosed the data for 2016 inflation, the same local university released its forecast of 2.6 per cent for the inflation of Macau in 2016!
There are days that start badly!
Let’s put it this way: it is not too difficult to forecast the final value of inflation in the final stage of the year.
Throughout 2016, until November, the monthly average growth of the CPI, in absolute value, was only 0.124!
In order for inflation to be 2.6 in December, this increase would have to have risen to 3.1 in that month!
Well, the increase in absolute value of the CPI stood at 0.19 in December!
For 2016, my predictions point to a real GDP fall of 1.6 per cent!
By 2017, GDP could grow back to around 4.2 per cent, ranging from 3.5 to 4.5 per cent.
Regarding inflation, it could be between 2.19 and 2.55 percentage points, and in a worst- case scenario, if real estate and gaming see double-digit growth, it could reach values of around 2.66 per cent!
If the CPI is to evolve in absolute terms the way it did in 2016, inflation would be much lower, at around 1.43 per cent!
Mathematically, it is expected that until May 2017, inflation will tend to go down and from then on to increase gradually.
We are at the beginning of the year and the world economy will be in so much trouble with Trump’s election and his suicidal policies.
We have two ways in Portuguese to refer to the actual US President and his policies: “trampa” and “tra(m)palhice” – the last word being my view of his nonsense policy. I will not be so impolite as to translate the first word!
So, forecasts will be an even more “artistic” exercise in 2017!