EIU: GDP may grow in 2017

Macau’s gross domestic product (GDP) could increase 5.3 per cent in 2017, despite decreasing 5.9 per cent this year, according to estimates by the Economist Intelligence Unit (EIU), Portuguese-language newspaper Tribuna de Macau reports. The EIU, an economic research group belonging to financial news entity The Economist Group, believes Macau GDP will return to positive numbers after a 0.9 per cent and 20.3 per cent decrease in 2014 and 2015, respectively. With regard to gross fixed capital formation (GFCF), which measures the level of investment, the report posits the territory will see a 3.3 per cent decrease in 2017, better than the 19.7 per cent decrease in investment registered this year. The report mentions how in recent years investment registered high growth in 2014, with a 37.7 per cent increase, mainly due to the construction of major hotel and gaming resorts, with that investment growth rate going down to 0.9 per cent in 2015, until investment started decreasing this year, Tribuna reports. The conclusion of most of the gaming operators projects in the Cotai area and the reduction of government public investment by falling gaming revenues and consequent fiscal reserves decrease, is deemed one of the reasons for the GFCF fall. The EIU report also predicts that the percentage of GDP comprising public expenses will continue to contract moderately from 12.2 per cent this year to 10.8 per cent in 2017, after it represented 25.1 per cent and 14.1 per cent in 2014 and 2015, respectively. The report also states the service trade balance will continue to have a surplus from 2016 to 2017.