Taiwan's 2013 economic growth forecast at 3.5 percent

04/09/2013 05:27 PM
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Taipei, April 9 (CNA) Taiwan's economic growth in 2013 will rebound to 3.5 percent without spurring inflation as external conditions improve, the Asian Development Bank (ADB) forecast Tuesday.

In its latest Asian Development Outlook report, the ADB forecast that Taiwan's industrial sector will benefit from recovering demand in China, while its service sector will be boosted by increased tourism amid warming ties across the Taiwan Strait.

Private investment is expected to pick up as the Taiwan government plans to encourage investment in the high-technology manufacturing sector, reduce barriers for foreign investors and encourage Taiwanese businesses in China to return home to invest, the report said.

This will help push Taiwan's economic growth from 1.3 percent in 2012 to 3.5 percent in 2013, the report said.

However, Taiwan authorities "should continue to maintain adequate policy flexibility to respond to economic challenges" that may be posed by a slowdown in China or a weaker Japanese yen, the ADB advised.

"The continued recovery in exports, driven by growing momentum in the major industrialized economies including the euro area, could be the main engine of economic expansion in 2014," the report said.

"Improved external demand should encourage private investment and employment, help sustain private consumption, and elevate economic growth to 3.9 percent" in 2014, it said.

In terms of Asia's economy as a whole, the report said the region's gross domestic product is predicted to expand by 6.6 percent in 2013 and 6.7 percent in 2014, following a 6.1 percent growth in 2012.

The economic improvement in Asia is mainly driven by growth in China and Southeast Asia, according to the report.

China's economy is expected to grow from 7.8 percent in 2012 to 8.2 percent this year and 8.0 percent in 2014 on strong consumption and investment, while India's growth may rise from 5 percent in 2012 to 6 percent in 2013 and 6.5 percent in 2014, the ADB forecast.

"Southeast Asia is benefiting from robust domestic demand and greater trade with its neighbors in the region" but India must create a more favorable investment environment if it is to sustain this higher rate, the ADB said in the report.

Meanwhile, the bank suggested that Asia continue to boost domestic demand and increase trade with emerging markets as the situation in the United States, Europe and Japan remains sluggish.

(By Chang Ya-ting and Jamie Wang)enditem /pc

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