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TIER lowers forecast for Taiwan's 2023 GDP growth rate to 2.58%

01/31/2023 06:43 PM
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CNA photo Jan. 30, 2023
CNA photo Jan. 30, 2023

Taipei, Jan. 31 (CNA) The Taiwan Institute of Economic Research (TIER) on Tuesday lowered Taiwan's 2023 economic growth forecast to 2.58 percent, a cut of 0.33 percentage points from its November forecast.

TIER President Chang Chien-yi (張建一) said the institute had cut its gross domestic product (GDP) forecast due to the continued negative effects of economic uncertainty and high global inflation on Taiwan's exports.

Despite the gloomy outlook internationally and the potential impact on Taiwan's foreign trade and investment, domestic demand remains robust, said Gordon Sun (孫明德), director of TIER's Economic Forecasting Center.

TIER predicted that the adverse effects of COVID-19, the ongoing Russia-Ukraine conflict, soaring inflation and climate change would continue into 2023, casting a shadow over the performance of the world economy.

The institute, however, said it was hopeful the government's relaxation of COVID-19 control measures and the reopening of Taiwan to tourists would prove a boon for domestic private consumption, which TIER said it expected to expand by 5.95 percent, a 1.63 percentage points increase from the institute's November forecast.

In response to concerns over creeping inflation, TIER kept its forecast for Taiwan's Consumer Price Index growth rate at 1.95 percent this year, unchanged from its November figures.

TIER, meanwhile, cautioned against betting on a broad economic rebound brought on by China's ending of its strict zero-COVID measures, saying that that country's economic revival was "far from certain."

The institute added that it would be hard to say before March "whether the flow of people and private consumption have recovered in China."

On Tuesday, TIER also reported that Taiwan's manufacturing purchasing manager index (PMI) in December increased by 0.81 from November to 85.97, while the construction PMI also rose by 5.55 to 92.87, the second consecutive month of growth for both indexes.

(By Flor Wang and Pan Tzi-yu)


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