Goldman Sachs Group cut its growth forecasts for Taiwan, citing the demise of the nation's manufacturing sector, and said it expects the local currency to strengthen less than previously anticipated.
The bank cut its economic growth forecast for this year to 3.8 percent from 4 percent and its estimate for next year to 4.2 percent from 4.5 percent, according to a research note published yesterday. It also changed its 12-month forecast for the Taiwan dollar to NT$31 per US dollar from NT$28.5.
"We turned less bullish on export and domestic demand fronts," Goldman economist Enoch Fung said in the note. "The migration of the manufacturing sector to the mainland has been the main drag" on Taiwan's exports, he said.
Goldman estimates that the proportion of Taiwan's export orders that are produced overseas has doubled to 38 percent in the past three years.