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Taiwan's economic outlook to improve over next 6 months: survey

2017/05/13 18:21:19

Taipei, May 13 (CNA) Taiwan's economy is expected to improve over the next six months, while the Taiwan dollar will depreciate against the greenback, according to Germany-based Ifo Institute.

In its latest quarterly World Economic survey, Ifo said that Taiwan's exports, which account for about 60 percent of the country's gross domestic product, will continue to pick up, while local consumer prices will increase accordingly.

Government data show that Taiwan's exports for April rose 9.4 percent from a year earlier, marking the seventh consecutive month of year-on-year growth, on the back of strong global demand at a time when the global economy is recovering.

In the first four months of this year, Taiwan's outbound sales rose 13.6 percent from a year earlier to US$96.42 billion. The government indicates that exports for May are likely to continue to trend higher, up 8-10 percent from a year earlier.

In the wake of improved export performance, several economic think tanks have upgraded their forecast of Taiwan's 2017 GDP growth to more than 2 percent.

The Taiwan Institute of Economic Research (TIER) is the latest think tank to upgrade its GDP growth forecast for 2017 by 0.26 percentage points to 2.04 percent, compared with a 1.50 percent increase in 2016.

In addition, Ifo said that private consumption in Taiwan will stage a rebound over the next six months after stagnating in the first quarter, while capital formation is also expected to improve.

The survey on Taiwan's economy was released after Ifo interviewed 15 experts from economic think tanks, financial institutions and academic circles, according to the National Development Council, the top economic planning government agency in the country.

The German research group said the Taiwan dollar will fall against the U.S. dollar at a time when the U.S. Federal Reserve is pursuing a rate hike cycle on the back of an improving U.S. economy, the world's largest.

In the latest policymaking meeting held in early May, the Fed ignored a slow first quarter but expected the U.S. economy to grow at a faster pace for the rest of the year, which has raised hopes the U.S. central bank will increase its key interest rates at the next policymaking meeting scheduled for June.

As for the global economy, Ifo said the fundamentals improved significantly in the second quarter of this year with the Ifo World Economic Climate index rising from 2.6 points in the first quarter to 13.0 points, marking the highest growth since January 2013.

Ifo said that expectations for the global economy also increased after it interviewed 1,118 economic experts from 120 countries.

"The main drivers remained the advanced economies, and especially the European Union," Ifo said." Both assessments of the current economic situation and expectations continued to follow an upwards trend in most countries."

(By Chen cheng-wei and Frances Huang)