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Think tank's forecast for Taiwan's economic growth edges higher

2017/07/18 14:49:46

CNA file photo

Taipei, July 18 (CNA) The Chung-hua Institution for Economic Research (CIER) has raised its forecast for Taiwan's economic growth on expectations of higher exports due a stronger global economic recovery than originally foreseen.

The think tank on Tuesday revised its projection for Taiwan's gross domestic product (GDP) growth in 2017 to 2.14 percent, up 0.03 percentage points from its previous forecast of 2.11 percent in April.

It also predicted GDP growth of 2.43 percent, 1.84 percent and 1.75 percent in the second to fourth quarters, respectively, and of 2.15 percent for 2018 as a whole.

CIER President Wu Chung-shu (吳中書) said the momentum of the global economic recovery has been stronger than expected, which should help Taiwan's exports and boost GDP growth.

On investment, Wu said that while capital inflows have been far from ideal in recent months, private investment in the latter part of the year should still grow slightly, providing some limited growth momentum.

Asked if a delay in the release of the iPhone 8 would be unfavorable to economic growth later in the year, Wu expected the impact would be limited. What was important, he said, is how well the market will accept the new product.

Many Taiwanese suppliers, including some of the country's top companies including Taiwan Semiconductor Manufacturing Co., are contributing to the iPhone 8, and their shipments could be delayed if the new phone's launch is postponed.

Wu said he was also expecting other important sectors in Taiwan, such as high-end agriculture and the information communications sector, to help balance development.

The CIER president cautioned that there were several sources of uncertainty that could affect economic activity, including the U.S. Federal Reserve's reduction of its balance sheet, the policies of major central banks, the price of crude oil and other commodities, Chinese factors, and geopolitical risks.

He also pointed to uncertainties at home, such as the direction of domestic investment and the timetable for major public infrastructure projects, as also potentially affecting growth.

The CIER's latest forecast was in line with those of many other institutions which generally see Taiwan as growing by more than 2 percent this year.

The Cabinet-level Directorate General of Budget, Accounting and Statistics forecast Taiwan's growth in 2017 at 2.05 percent, while the Yuanta-Polaris Research Institute, the Taiwan Research Institute, and the Taiwan Institute of Economic Research have come in at 2.10 percent, 2.01 percent, and 2.04 percent respectively.

Academia Sinica, Taiwan's top academic research institution, has forecast 2017 GDP growth at 1.68 percent.

(By Tsai Yi-chu and Lilian Wu)
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