The Macau economy is expected to grow 5.8% for this year, followed by 3.9% growth in 2019, according to a report by the Economist Intelligence Unit (EIU).

Macau 2018 growth forecast at 5.8%News outlet The Macau Hub reported on the EIU’s forecast that the special administrative region’s growth in gross domestic product (GDP) will continue to be fueled by the gaming sector, which itself has seen below-expected gross gaming revenue (GGR) the past year.

Macau’s Statistics and Census Service (DSEC) had previously released data for the first half of the year, showing 7.6% GDP growth year on year.

The EIU said that the Macau government’s attempts at diversifying the economy outside of gambling would remain largely unsuccessful. However, according to the EIU, the government should continue working to grow its non-gambling tourism activities to boost the entertainment sector.

With Typhoon Mangkhut hitting the city the other weekend, several analysts had adjusted their GGR forecasts for the quarter. The overall effect on the economy, however, is seen to be negligible.

The EIU expects a slowdown in mainland China’s economy will affect Macau; however, this will be offset somewhat by increased incomes to be spent by visitors from China.

Chinese tourists remain the hugest population among those visiting Macau, with 2.53 million Chinese visiting last August, a 25.3% increase from August last year. A total of 3.4 million people visited in August, a 18.7% increase year on year.

Macau’s strong 2017 performance, much on account of growth in the VIP gaming business, was preceded by three years of contraction owing in part to the Chinese government’s anti-corruption drive where it cracked down on outflows to Macau.

According to the EIU, inflation for 2018 is expected to hold at 2.9%, lowering to 2.8% the following year. The budget balance will be at 10.3% for 2018, and 9.4% in 2019. The unemployment rate is projected to stay at 1.9% for the two years.