TIER raises Taiwan GDP growth forecast to 3.85% for 2024

Taipei, July 25 (CNA) The Taiwan Institute of Economic Research (TIER) raised its GDP growth forecast for Taiwan to 3.85 percent for 2024, up 0.56 percentage points from the estimate made in April, based on its optimism over improved economic situations both at home and abroad.

Thanks to a stable employment market, wage increases, and a booming stock market since the beginning of the year, private-sector consumption is expected to continue growing in the months ahead, TIER Economic Forecasting Center Director Gordon Sun (孫明德) said.

In terms of investment, Sun said a global artificial intelligence (AI) boom had pushed domestic semiconductor companies to expand production capacities in advanced chip manufacturing, packing and testing.

As the manufacturing sector remains predominantly optimistic about the future economic circumstances, many companies are more willing to expand, which is expected to prompt the performance in private-sector investment, he noted.

In terms of foreign trade, he said Taiwan's exports have outperformed expectations thanks to rebounding global demand and a surging need for emerging technology applications.

There is a high chance Taiwan's central bank maintains key interest rates in the third quarter as a result of eased inflation pressure and anticipated rate cuts in the United States are high, Sun added.

Sun, however, said he believes that Taiwan's central bank still has room to increase interest rates, adding the picture would become clearer in early September, based on product prices, economic momentum and the domestic real estate market in August.

Regarding local consumption, he said, due to a continuously record-setting stock market in June and strong peak season demand pushing for an increase in exports, financial, transportation and warehousing industries are particularly upbeat about their future business climate.

The construction industry was also keen about the business climate in the coming six months, boosted by a domestic economic recovery and ongoing construction of a host of public work projects, he said.

According to Sun, the real estate market has been operating at peak performance, showing no descendant signs.