Underpinned by robust exports and domestic consumption, the nation's economic growth rate may reach 5.08 percent this year, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday, revising upward the forecast of 4.81 percent growth it made in January.
The private think tank also said the first-quarter economic growth rate, measured by GDP, was 5.52 percent, higher than the 5.17 percent of the previous quarter.
"We believe that the current prosperity will persist through next year," TIER president Wu Rong-i (吳榮義) said yesterday at a press conference.
The export sector will continue to boom amid the strong recovery of the world economy, which is spurring imports of raw materials and industrial equipment, Wu said.
Export orders soared 27.81 percent to US$17.24 billion last month. For the first three months of the year, local manufacturers secured export orders of US$46.21 billion, up 22.67 percent from the same period last year, the Ministry of Economic Affairs announced last week.
The bullish economic outlook further boosts domestic invest-ment, which TIER expected to rise by 13.82 percent this year from the minus 0.7 percent growth the nation recorded last year.
As the jobless rate hit its lowest level in the past three years at 4.45 percent last month, along with an improving financial market, domestic consumption is predicted to increase 3.08 percent this year, compared with a 0.79-percent growth last year, Wu said.
However, local manufacturers were less optimistic than the research institute. Based on a survey conducted last month, TIER found that 51.9 percent of local manufacturers said they were positive about the economy for the next six months, down from 56.8 percent when the institute conducted its last poll in February.
Manufacturers who were pessimistic about the economy increased to 4.7 percent last month. In February, only 3.1 percent of the polled manufacturers said they felt pessimistic about the economy.
Wu blamed the increased economic uneasiness on manufacturers' concern over a possible hike in interest rates if rates in the US are raised, given US Federal Reserve Board Chairman Alan Greenspan's comment last week that deflation no longer appears to be a threat.
The Fed may not rush to tighten US credit in the near future, which may allow Taiwan's central bank to keep the nation's near-term interest rates relatively low to uphold the reviving economy, Wu said.
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