Lehman Brothers Holdings Inc yesterday raised its forecast for the nation's economic growth for the second time in a month, citing a recovery in the nation's exports on rising demand for electronics products. Its latest annual GDP growth forecast for this year is 3.6 percent.
The investment research unit of Lehman Brothers had taken a more conservative view about the economy than other research houses and the government's statistics agency, in light of the nation's slower-than-expected growth in the first half of this year, which came in at just 2.8 percent.
"However, in recent months the data flow has taken on a distinctly stronger tone," Rob Subbaraman, an economist at the securities firm said in a report released yesterday.
Strong economic data was underpinned by an upswing in global electronics demand, a revival in China's imports, a moderate decline in oil prices and a continuation of loose macroeconomic policies, he said.
Last month, export orders received by Taiwanese companies rose about 22 percent year-on-year to US$23.7 billion, setting an all-time high, according to statistics released by the Ministry of Economic Affairs.
The weakening local currency against the US dollar is helping boost Taiwan's exports, which are equivalent to two-thirds of Taiwan's GDP, according to Subbaraman.
In addition to strengthening exports, Taiwan's industrial output increased 6.5 percent from a year ago and the unemployment rate improved to a 55-month low of 4 percent last month, the Lehman Brothers economist pointed out.
"It is now safe to conclude that Taiwan's economy is recovering," Subbaraman said.
Subbaraman raised his forecast for Taiwan's GDP growth this year from a previous estimate of 3.3 percent on Oct. 7, when he upgraded his outlook for the nation's economic growth from 3.1 percent.
But, he remained unchanged on his 5 percent GDP growth prediction for next year.
Subbaraman's projection is still slightly lower than the government's forecast of 3.65 percent expansion in GDP for this year. The government aims to boost Taiwan's economic growth to 4 percent.
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