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Taiwan's economy forecast to grow 3.18% in 2024: Think tank

12/14/2023 02:57 PM
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The Taiwan Research Institute expects the local economic growth to rebound in 2024 partly on an improved export performance in its latest forecast. CNA file photo for illustrative purpose only
The Taiwan Research Institute expects the local economic growth to rebound in 2024 partly on an improved export performance in its latest forecast. CNA file photo for illustrative purpose only

Taipei, Dec. 14 (CNA) Taiwan's gross domestic product (GDP) is expected to grow by 3.18 percent in 2024, partly on an improved export performance, according to a recent forecast by one of the country's leading economic think tanks.

The domestic economy will also benefit from a rebound in private investments in 2024, on the back of a relatively low comparison base over 2013, the Taiwan Research Institute (TRI) said at an economic forum on Wednesday.

In light of those factors, Taiwan is likely to record a GDP growth of 3.18 percent in 2024, the TRI said, giving its first domestic economic growth forecast for next year.

Meanwhile, the think tank lowered its 2023 GDP growth forecast by 0.04 percentage points from its previous estimate of 1.45 percent, citing weak global demand, high inflation, and aggressive rate hikes by the major central banks, which it said have affected Taiwan's exports.

In 2024, however, Taiwan's exports of merchandise and services are expected to bounce back, growing 6.08 percent after an estimated contraction of 3.80 percent in 2023, while imports in that category are likely to increase 7.24 percent, after an expected drop of 4.55 percent this year, the TRI said.

The think tank also forecast a recovery of Taiwan's private investments in 2024, estimating a 2.14 percent growth from the expected fall of 9.96 percent in 2023 due to manufacturers' scaling back their expansion plans amid weak global demand.

Private consumption growth, however, will moderate in 2024 to 2.30 percent from an anticipated 8.31 percent in 2023, when strong buying emerged in the wake of the COVID-19 pandemic, the think tank said.

The think tank has also forecast Taiwan's GDP growth at 5.78 percent in the first quarter of 2024, 3.76 percent in the second, 2.59 percent in the third, and 0.97 percent in the fourth.

Speaking at Wednesday's forum, TRI founder Liu Tai-ying (劉泰英) said the major problem in Taiwan is its savings glut. He suggested that the government encourage the private sector to increase its investments not only in private projects but also in public works.

Although Taiwan's economy is expected to improve in 2024, there are still some uncertainties about issues that may impact the global economy, including climate change, which can cause flooding and drought, he said.

Other factors that may affect Taiwan's economic performance in 2024 include tensions between the United States and China, the presidential elections in Taiwan and the U.S., and China's attitude towards Taiwan's new government after election, according to the TRI.

The TRI's forecasts for Taiwan's economic performance in 2023 and 2024 were in line with the government's.

The Directorate General of Budget, Accounting and Statistics (DGBAS) last month lowered its forecast for Taiwan's 2023 GDP growth by 0.19 percentage points to 1.42 percent, and raised its 2024 growth estimate to 3.35 percent from an earlier prediction of 3.32 percent.

(By Pan Tzu-yu and Frances Huang)

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