The Consumer Price Index (CPI) in Macau increased by 0.19% year-on-year in May, slightly slower than the 0.23% recorded in April, according to official data released by the Statistics and Census Service (DSEC).
Despite a 0.05% decrease since April, the territory avoided deflation for the third consecutive month.
Deflation indicates weakness in domestic consumption and investment and is particularly severe, as a fall in asset prices, typically acquired through credit, creates a mismatch between the value of loans and bank guarantees.
Mainland China, by far Macau’s largest trading partner, has been in deflation for four months. The CPI declined by 0.1% in May, the same as in April and March.
Nevertheless, the indicator disclosed by the National Bureau of Statistics of the Asian country on May 9 showed a milder drop than most analysts had predicted, who anticipated a decrease of 0.2%.
In the neighboring region of Hong Kong, inflation slightly decreased from 2% in April to 1.9% in May.
According to DSEC data from Macau, the deceleration in inflation in May is attributed to the cost of meals purchased outside the home, which only increased by 1.39%, whereas mortgage expenses for apartments rose by just 0.42%.
The housing price index fell by 11.7% last year, despite the Monetary Authority of Macau approving three interest rate cuts in the last three months of 2024.
In April of the previous year, Macau’s Legislative Assembly approved the elimination of various taxes on housing purchases to “increase liquidity” in the real estate market, as stated by the Secretary for Economy and Finance, Lei Wai Nong.
Despite the rise in visitor numbers, the region saw a 2.5% reduction in clothing and footwear prices.
