Taipei, Oct. 15 (CNA) The Chung-Hua Institution for Economic Research (CIER, 中經院), one of Taiwan's leading think tanks, said Thursday that it has slashed its forecast for the country's gross domestic product (GDP) growth for 2015 to less than 0.9 percent.
The cut from an earlier estimate of a 3.04 percent increase made in July results from weakening global demand, which has exacerbated Taiwan's export performance, the CIER said.
The think tank seemed less upbeat about the local economy than the government, which lowered its prediction of Taiwan's GDP growth in mid-August to 1.56 percent from 3.28 percent.
Many market analysts expect that the government will cut its forecast again, as it is not easy for Taiwan to maintain its economic growth at a 1 percent pace as Taiwanese exporters are feeling the pinch of the weak global market.
The CIER said that the local economy for the third quarter contracted 2.11 percent from a year earlier after the country's exports in merchandise exports fell 13.82 percent year-on-year and merchandise imports dropped 19.59 percent in U.S. dollar terms. The 2.11 percent contraction showed a much worse-than-expected economic performance than the government's earlier estimate of a 0.1 percent rise for the quarter.
Wu Chung-shu (吳中書), president of the CIER, said that the economic contraction in the third quarter was the result of slowing demand in the global market, adding that as exports account for about 70 percent of Taiwan's GDP, the unfavorable circumstances hurt the country's economy badly.
Wu said, however, that the local economy is expected to stage a rebound and grow 1.57 percent year-on-year in the fourth quarter.
Following a disappointing export performance in the third quarter, the CIER has also cut its forecast for Taiwan's growth in merchandise and service exports to 0.46 percent for the whole of 2015 from an earlier estimate of a 3.88 percent rise.
The think tank has forecast that Taiwan's imports in merchandise and services for 2015 will grow only 1.40 percent from a year earlier, a downward revision from a previous prediction of a 1.69 percent rise.
The CIER has lowered its forecast for Taiwan's private fixed investment growth for 2015 to 1.43 percent from an earlier estimate of 2.28 percent, while it has raised its predictions for the country's total fixed investment growth and private consumption growth to 0.66 percent and 2.75 percent, respectively, from 0.60 percent and 2.46 percent.
Wu said that Taiwan's economic weakness is not an isolated case, adding that other export-oriented countries have also been hurt.
The CIER said that Taiwan's economy is expected to grow 2.27 percent in 2016, a downward revision from an earlier estimate of a 3.21 percent increase.
(By Yang Shu-min and Frances Huang)ENDITEM/J