The nation's economy is expected to expand 2.67 percent this year and 3.85 percent in 2003 after contracting 1.91 percent last year, a local think tank said yesterday.
The Chung-Hua Institution for Economic Research (CIER, 中經院) yesterday revised its estimate for this year's GDP growth from its previous projection of 2.36 percent in December.
"Private consumption will be the main driving force to boost the economy," Mai Chao-cheng (
In addition, Mai said that growth on a quarterly basis could hit 4.83 percent by the end of this year.
Should exports and private investment both increase by NT$10 billion per quarter, GDP could further rise to hit 3.67 percent this year, the economist said.
In a worst-case scenario, GDP could come in at just 1.1 percent, Mai said. High oil prices resulting from tensions in Middle East combined with a NT$5 billion drop in private investment and a NT$20 billion in exports would lead to the lower figure, he said.
Although rising exports and industrial output are expected to contribute to the nation's rebound, the economy can expect little help from private investment.
Mai said private investment was expected to grow by just 0.08 percent this year.
He also rejected speculation that the nation could face a W-shaped recovery, saying "the upcoming economic recovery is slow but stable."
Inflation shouldn't be a worry. The consumer price index is likely to rise just 0.94 percent this year, the think tank's report concluded yesterday.
Liang Kuo-yuan (
* Most of the nation's growth this year is expected to come in the fourth quarter, when the GDP is forecast to expand by 4.83 percent.
* The IMF forecasts that the nation's GDP is expected to grow by 2.3 percent and 4.8 percent for this year and next year.
* CIER says it expects growth to come in at 3.85 percent for next year.
Peter Kurz, head of investment research firm Insight Pacific, said he expects international capital flows from the US to Asia to pick up this year.
Kurz said the greenback's depreciation and interest-rate cuts in the US should boost capital flows to Asia, increasing foreign inflows into the local stock market.
Meanwhile, most Asian countries, including Taiwan, will see an economic upturn in the coming two years, the IMF forecast in its annual report issued Thursday.
The IMF forecast in its 2002 "World Economic Outlook" that Taiwan's GDP is expected to grow by 2.3 percent and 4.8 percent for this year and next year, respectively.
According to the report, the nation's GDP expanded by 5.9 percent in 2000 but registered negative growth of 1.9 percent in 2001.
The IMF pointed to the cyclical recovery of the electronics industry as the leading force behind the ongoing Asian economic rebound taking place in Hong Kong, China, Malaysia, Singapore, South Korea, Taiwan and Thailand -- the same phenomenon that occurred after the 1997-1998 Asian financial crisis.
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