Think tank raises Taiwan 2024 GDP growth to 3.38% amid export optimism

Taipei, April 19 (CNA) The Chung-Hua Institution for Economic Research (CIER) raised its forecast for Taiwan's gross domestic product (GDP) growth this year to 3.38 percent, citing optimism about the country's export growth.

CIER, a leading Taiwanese think tank, on Friday said 3.38 percent GDP growth represents a 0.28 percentage point upgrade from its previous estimate of 3.10 percent in January.

The upward adjustment comes as global trade in goods is projected to rise 5.08 percent this year, coupled with a boom in demand for artificial intelligence applications which has helped boost Taiwan's exports, CIER said.

Meanwhile, Taiwan's export of goods and services is also forecast to grow 5.63 percent in 2024, after falling 4.32 percent in 2023.

The economy is about to "set sail," CIER President Yeh Chun-hsien (葉俊顯) said, indicating that he is optimistic about the country's export performance this year.

However, due to the relatively high comparison base last year coupled with the recent earthquake in Hualien and rising costs in domestic tourism, Yeh said growth in Taiwan's private consumption will remain 2.09 percent in 2024, while private investment is forecast to fall by 0.2 percent.

The drop can be attributed to uncertainties in the global economy and the Central Bank's surprise interest rate hike in March, which prompted businesses to be more cautious about their investments, Yeh explained.

Wu Ming-hui (吳明蕙), head of the National Development Council's Department of Economic Development, was more optimistic, citing various surveys showing that many businesses have indicated a positive outlook for the future.

In addition, the government's promotion of net-zero transformation, energy transformation, and helping enterprises move toward digitization are all conducive to promoting an increase in private investment, Wu said.

On Friday, CIER said Taiwan's consumer price index (CPI) is expected to grow 2.30 percent in 2024, which is above the 2 percent alert set by the central bank.

According to CIER, CPI growth reflects the fact that inflationary pressure will remain a concern this year.

It warned that although Taiwan's GDP growth is forecast to pass 3 percent, uncertainties in the monetary policies of major economies, China's economic growth and cross-strait relations could still impact economic development.