33
Playing with numbers M
real Gross Domes-
tic Product (GDP) was 49.1 percent higher in the second
quarter year-on-year, according to of- fi cial fi gures. The government has also revised upwards the economic growth in real terms for the fi rst quarter, from 30.1 percent year-on-year to 31.4 percent. Although the numbers are impres-
sive by any measure, how correct are Macau’s GDP data? Economist Albano Martins says the
fi gures are exaggerated. According to Mr Martins, no actual defl ator is used for exports of gaming services, which pushes up the fi nal real GDP fi gures. Exports of gaming services are the
main component of Macau’s GDP and the component for which no defl ator is
used. It has led to the situation where the city is posting real GDP rates higher than the corresponding nominal GDP rates, although Macau is not facing de- fl ation. Indeed, it is facing quite the op- posite. For instance, Macau posted 41.2
percent nominal GDP growth for the second quarter, almost eight percentage points below the real GDP growth rate, a situation Mr Martins said was “absurd”. Real GDP is adjusted for infl ation.
Nominal GDP is not. Economists usu- ally regard real GDP as a more accu- rate measure of an economy’s output over time.
Revision looming When asked by Macau Business to clar-
Infl ation to stay ‘relatively high’ S
ecretary for Economy and Finance Francis Tam Pak Yuen expects Macau’s infl ation rate to remain “relatively high” in the second half of 2010. “The government will keep an eye [on infl ation] and it will set up measures to
alleviate the pressure on citizens,” Mr Tam said. He said several external factors were likely to keep the infl ation rate up, such
as the pataca’s exchange rate against the yuan. Macau’s Composite Consumer Price Index (CPI) was 2.55 percent higher in
August than a year before because of increases in the price of food and non- alcoholic beverages. August’s Composite CPI was 0.21 percent lower than July’s. The average
Composite CPI for the fi rst eight months of the year increased by 2.26 percent year-on-year. For the 12 months ended August, the average Composite CPI was up 1.38 percent year-on-year.
Macau’s second quarter real GDP increased by almost 50 percent year-on-year but there is criticism of the way the government calculates it acau’s
ify the use of GDP, the Statistics and Census Service said it was working on a major revision of Macau’s GDP, which is scheduled to be released later this year. “The major revision, undertaken
regularly every fi ve to six years, will incorporate the latest international rec- ommendations
applicable to Macau,
new sources of data, re-examination of methods used, as well as a revised GDP series,” the bureau said. Mr Martins says that if exports of
gaming services had been defl ated us- ing the implicit defl ator used for private consumption, Macau’s second quarter real GDP growth rate would have been 39.7 percent instead of 49.1 percent. Last year, real GDP would have actu- ally contracted by around 2.3 percent instead of growing, as offi cially stated, by 1.3 percent. Mr Martins also says Macau should
publish its GDP statistics more swiftly, noting that the city takes longer to come up with its fi gures than the world’s big- gest economies, the United States and the mainland. Last month, Secretary for Economy
and Finance Francis Tam Pak Yuen said he expected Macau to post real GDP growth of no more than 30 percent for all of 2010. He said GDP growth would slow in the second half, because in the equivalent period last year Macau had “already entered a stage of recovery” from the global fi nancial crisis.
OCTOBER 2010
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