TIER paints rosier economic forecast on export figures

The nation's economic growth rate this year is likely to surpass the government-set target of 5 percent amid the global economic recovery, a private think tank said yesterday.

In addition, exports and industrial production have shown marked growth year-on-year, providing a favorable foundation for an economic pickup, the Taiwan Institute of Economic Research (TIER, 台經院) said in its monthly survey.

"There are plenty of reasons for us to be optimistic about the latter half of this year," TIER president Wu Rong-i (吳榮義) told reporters.

The passage of the Special Statute for Increasing Investment in Public Construction (新十大建設條例) earlier this month is expected to provide a shot in the arm by stimulating domestic demands and stepping up growth momentum, Wu said.

However, he said that the imbalance between inbound and outbound trade volumes must be addressed.

China-bound investments hit US$1 billion last month, more than 60 percent of the overall outbound volumes. In contrast, inbound investments only reached US$186 million, showing more efforts are needed to lure foreign investors, he said.

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 25.9 percent last month to US$17.3 billion from a year earlier, the Ministry of Economic Affairs reported on Thursday. For the first five months of the year, manu-facturers secured export orders of US$81.5 billion, up 25.6 percent from the same period last year, the ministry said.

According to the Directorate General of Budget, Accounting and Statistics, industrial production from January to last month rose 14.4 percent over the same period last year.

However, manufacturers appeared less bullish despite the rosy prospects at home and abroad, according to the TIER survey. The survey, conducted last month, showed that 41.1 percent of respondents were optimistic about the economy for the next six months, compared to 46.4 percent in the April poll.

Some 51.1 percent of respondents maintained their economic outlook, up from 46.6 percent polled in April, while 7.8 percent of respondents appeared bearish about the economic outlook, up from 7 percent in April.

Wu attributed the lack of confidence to political infighting and China's efforts to tame its overheated economy, which has made domestic manufacturers of raw materials turn conservative.

But he said the central bank's decision to maintain a lax monetary policy would support the continuing economic recovery. The central bank said on Thursday that it would keep interest rates unchanged.