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Taiwan GDP expected to grow 2.27% in 2018: CIER

2017/12/19 15:18:42

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Taipei, Dec. 19 (CNA) The Chung-Hua Institution for Economic Research (CIER) forecast on Tuesday that Taiwan's gross domestic product (GDP) will grow 2.27 percent in 2018 after a projected 2.53 percent year-on-year increase in 2017.

At a news conference, CIER, one of Taiwan's leading think tanks, said it has raised its forecast for GDP growth in 2017 to 2.53 percent from an earlier forecast of 2.18 percent made in October. It also raised the estimate for 2018 economic growth from 2.20 percent to 2.27 percent.

CIER president Wu Chung-shu (吳中書) said the slightly lower GDP growth expected for 2018 largely reflects a relatively high comparison base in 2017. However, growth is expected to top 2 percent for both years on the back of solid global demand at a time when the global economy remains on the way to recovery.

According to CIER, Taiwan's GDP is expected to grow 2.69 percent in the first quarter of 2018, 2.39 percent in the second quarter, 2.00 percent in the third quarter and 2.02 percent in the fourth quarter.

As economic growth in the four quarters of next year is expected to hit or surpass 2 percent, that would mean Taiwan records quarterly GDP growth of 2 percent or higher for eight consecutive quarters, Wu said.

The CEIR forecast is more cautious than the government, which expects Taiwan's GDP growth to hit 2.58 percent in 2017 and 2.29 percent in 2018.

After inflationary adjustments, Taiwan's exports in merchandise and services for 2018 are expected to grow 3.47 percent from a year earlier, CEIR said, while imports in merchandise and services are expected to grow 3.51 percent in real terms.

The projected growth in imports and exports in 2018 is lower than the 5.34 percent and 6.86 percent, respectively, forecast for 2017, CIER data showed.

In 2018, private investment is expected to rise 1.70 percent from a year earlier, reversing an estimated 0.36 percent fall in 2017, while capital formation is expected to grow 2.79 percent next year, up from an expected 0.56 percent increase this year, CIER said.

CIER said the expected stronger investment growth in 2018 is based on the government's promotion of infrastructure projects, which will lead the private sector to raise investment.

The think tank said private consumption is expected to grow 2.00 percent in 2018, compared with an expected 2.18 percent increase in 2017.

Despite the expected lower private consumption forecast for 2018, CIER said a move by the government to raise wages for civil servants, teachers and military personnel by 3 percent, starting from January is expected to maintain the momentum of local private consumption.

CIER expects Taiwan's consumer prices will rise 0.99 percent, higher than the 0.56 percent increase forecast in 2017.

Peng Su-ling (彭素玲), director of CIER's Center for Economic Forecasting, said Taiwan's economy could face some uncertainty down the road, including the rate hike cycle of the U.S. Federal Reserve, movements in international crude prices, slowing economic growth in China and other geopolitical unease.

(By Tsai Yi-chu and Frances Huang)