Taipei, April 25 (CNA) One of Taiwan's leading economic think tanks has raised its forecast for the country's economic growth for 2017 to more than 2 percent because of expectations of an improved export performance.
The Taiwan Institute of Economic Research (TIER) predicted on Tuesday that Taiwan's gross domestic product (GDP) will grow 2.04 percent in 2017, 0.26 percentage points higher than its previous estimate made in January.
TIER is the third think tank in Taiwan to raise its 2017 GDP growth forecast to above 2 percent at a time when the global economic recovery seems to be picking up momentum because of stronger demand.
In late March, the Yuanta-Polaris Research Institute upgraded its forecast for Taiwan's 2017 GDP growth to 2.1 percent, from 1.8 percent previously, and the Chung-Hua Institution for Economic Research raised its forecast last week by 0.38 percentage points to 2.11 percent.
The TIER said a strong export performance will serve as a key driver of Taiwan's economic growth this year.
Taiwan's outbound sales in the first quarter rose 15.1 percent year-on-year to US$72.12 billion, the highest quarterly growth since the second quarter of 2011.
As a result, the think tank revised upward its estimate for growth in merchandise and service exports for 2017 as a whole to 4.35 percent, from 3.89 percent previously.
The think tank's prediction for private consumption growth in 2017 of 1.93 percent was little changed from the previous 1.90 percent, reflecting expectations that consumers will be cautious because of wage stagnation.
Meanwhile, fixed capital formation for 2017 is expected to grow 2.20 percent, slightly higher than the TIER's earlier prediction of 2.10 percent.
Private investment, which accounts for almost 90 percent of the total fixed capital formation, will grow 2.18 percent, up from an earlier estimate of 2.08 percent on expectations that the manufacturing sector will intensify efforts to expand, the TIER said.
Gordon Sun (孫明德), director of the TIER's Economic Forecasting Center, said Taiwan's GDP growth momentum for 2017 will become more apparent in the first half of the year, when major international brands such as Samsung Electronics Co. and Apple Inc., build up component inventories for their new products.
But those brands may not sustain the strong buying trend in the second half of the year, the think tank said, explaining its cautious attitude toward Taiwan's economic growth after June, Sun said.
According to the TIER, Taiwan's GDP is expected to grow 2.55 percent, 2.30 percent, 1.90 percent and 1.47 percent in the first, second, third and fourth quarters of this year, respectively.
Meanwhile, the TIER said the local manufacturing sector's business outlook improved to some extent in March, with the manufacturing composite index up 0.09 points from a month earlier to 98.29.
As for the services sector, the composite index rose 1.68 points from a month earlier in March to 91.93, the highest level in 22 months, indicating the sector's optimism toward the business climate, the TIER said.
(By Tsai Yi-chu and Frances Huang)
Enditem/ls