In May our inflation will be between 1.35 and 1.38 percent

I wrote in JTM (Jornal Tribuna de Macau newspaper) on April 28 that “April 2017 inflation in Macau … should be in the range between 1.49 to 1.52 percentage points (…)”.
I reinforced this idea again in my last JTM article on May 19, and in Business Daily on May 16, although this last article was prepared at the end of April.
On May 23, DSEC, the Statistics and Census Service of Macau, confirmed an inflation rate of 1.51 percentage points, meaning within the range of only 0.03 percentage points of error that I had advanced a month earlier!
This is the downward trend of Macau’s inflation, measured by the average CPI (consumer price index) variation of the last twelve months: 2.37 in December 2016, 2.2 in January 2017, then 1.91 in February, followed by 1.69 in March and finally 1.51 per cent last April.
And now, in May, what will our inflation rate be?
Using only the same variation of 0.03 percentage points, I believe our inflation will continue to go down and will end up in a range between 1.35 and 1.38 percentage points.
We will only know if this is correct on June 21.
It is difficult to predict how much inflation will be at the end of the year, and I must confess that this evolution is amazing, as rents continue to go down when everything else is going up!
Using only mathematics and a few economic projections, the data up to now seems to point to a number between 0.9 and 1.73 percentage points at the end of 2017, an interval that will be reduced as we move closer to it.
Really, it only means great progress if we consider that 2015 ended with an inflation rate of 4.56 percentage points, and 2016 with 2.37 per cent, and that this variable has been falling continuously since November 2014 when it reached a peak of 6.06 per cent!
To help you understand this trend, remember that 2014 was the year the casinos’ income began to go down, from June onwards.
If the warming up of the gaming and real estate is still not reflected in the CPI – and I really do not understand why – then inflation may well be below last year’s figures!
The latest forecast I know from UMAC and the Economist Intelligence Unit pointed to an inflation rate in 2017 of 2.1 and 2 per cent, respectively.
For me, it will continue to drop monthly, but somewhere in the middle of the year will start to rise gradually to reach a lower value than these two forecasts.