Think tank raises Taiwan 2021 GDP growth forecast to 5.84 percent

10/20/2021 05:37 PM
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A container ship at the port of Kaohsiung. CNA photo Oct. 20, 2021
A container ship at the port of Kaohsiung. CNA photo Oct. 20, 2021

Taipei, Oct. 20 (CNA) The Chung-Hua Institution for Economic Research (CIER) has raised its forecast for Taiwan's economic growth for 2021 to 5.84 percent, the highest estimate it has made in a decade.

In its report published on Wednesday, the CIER revised its projection of Taiwan's gross domestic product (GDP) growth in 2021 to 5.84 percent, up from the previous estimate of 5.16 percent in July.

According to the Taipei-based think tank, the new estimate is its highest growth prediction for Taiwan since 2011.

Strong exports in the manufacturing sector and growing investment in Taiwan continue to contribute to the country's economic growth in 2021, the CIER said.

At a press conference on Wednesday, CIER President Chang Chuang-chang (張傳章) said the forecast has taken into consideration the estimated benefits brought about by the stimulus vouchers issued by the Taiwan government in early October.

The government maintains that the vouchers, which are valued at NT$5,000 (US$178.50) and can be claimed by all Taiwanese and foreign residents with permanent residence, will boost private consumption.

However, Chang noted that China's ongoing electricity shortage may be a cause for concern even though the global economy is gradually recovering from COVID-19.

At the same time, a growing demand for goods has driven up prices, according to the CIER.

The think tank predicted that Taiwan's consumer price index (CPI) will grow by 1.84 percent in 2021, up from minus 0.24 percent in 2020.

Chang flagged an uptick in the import price index in Taiwan and observed that the hike in the prices of import products may affect those for domestic goods and services.

Meanwhile, the CIER forecast that private consumption will grow 1.38 percent in 2021.

Private consumption has been suppressed since the government introduced COVID-19 restrictions following a major virus outbreak in mid-May in Taiwan, the CIER said.

In addition, Taiwan's stock market has slowed since July, leading to a negative effect on consumption, the institute added.

(By Pan Tzu-yu and Teng Pei-ju)

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