CIER revises upward Taiwan's 2019 GDP growth forecast to 2.33 percent
Taipei, Oct. 18 (CNA) The Chung-Hua Institution for Economic Research (CIER) revised upward Friday its forecast for Taiwan's economic growth for 2019 to 2.33 percent, up from 2.06 percent in July.
As one of Taiwan's leading think tanks, CIER attributed the raised forecast to increases in returning Taiwanese investment and shifting of orders from China to Taiwan, which benefited local firms, as a result of the impact of escalating trade friction between the United States and China.
In the first half of this year, Taiwan's economy expanded by 2.12 percent year-on-year, it said, projecting that with booming technology product exports and returning Taiwanese investment, the country's economic growth rate will be even greater in the second half, with Q3 and Q4 growth rates forecast to hit 2.40 percent and 2.64 percent, respectively.
CIER, meanwhile, also raised its forecast for Taiwan's 2019 fixed capital formation growth to 6.99 percent from its 6.36 percent projection in July, the highest recorded projection since 2011.
Yeh Chung-hsien (葉俊顯), CIER vice president, said shifting orders from China to Taiwan, increasing investment by local major technology firms and the return of Taiwanese businesses will be the main economic boosters for Taiwan this year and also 2020.
While the U.S.-China trade dispute will continue to remain the main driver to Taiwan's economic trend, it is also worth noting that the downward decline in China's economic growth is also a key concern, Yeh said.
On Friday, Taiwan's central bank, however, cautioned that with the slowdown in the U.S. economy, coupled with its trade dispute with China, as well as the accelerated de-Americanization of Chinese vendors' supply chains, these factors could pose a serious impact on the shifting in production orders from China to Taiwan from next year.
Lin Tsung-yao (林宗耀), a central bank official, said the positive impact of the shift in orders for Taiwan will need to be watched closely to see if can be sustained through 2020, due mainly to the slowing U.S. economy and its higher comparative base period forecast for next year.
Meanwhile, Lin pointed out that if the relationship between the U.S. and Chinese technology giant Huawei continues to deteriorate, it could seriously affect the performance of Taiwanese exports to China.
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