Boosted by better-than-expected exports, the Taiwan Institute of Economic Research (TIER, 台經院) revised upward its GDP forecast for the year to 4.01 percent from the 3.95 percent predicted in August.
The growth momentum in the export sector, especially demand from China, will continue to support Taiwan's economy next year, TIER president David Hong (洪德生) said in a seminar yesterday.
For the first 10 months of the year, Taiwan's exports increased 13.8 percent to US$184.88 billion over last year, with the nation's trade surplus growing 59.2 percent to US$15.94 billion in the same period, the Ministry of Finance reported on Tuesday.
GDP is estimated to grow 4.11 percent next year, Hong said.
Exports to China and Hong Kong were worth US$73.29 billion, or 39.6 percent of total exports, in the 10 months to Oct. 31, according to the ministry.
"If it weren't for the export sector, Taiwan's economy would very likely revert back to last year's level," Hong said.
Exports to the US next year, however, may fall due to the soft-ening housing market, Hong said.
According to TIER, government investment and public enterprise investment are expected to decline by 1.48 percent and 6.15 percent, respectively. Private investment is estimated to drop by 0.04 percent, while private consumption, affected by the credit abuse storm, is expected to increase 1.76 percent.
With the bad consumer loan problem easing next year, private consumption
will rebound to 2.32 percent, and government investment increase by 2.04
percent with the implementation of the Cabinet's “Big Warmth” plan, Hong
The NT$1.17 trillion “Big Warmth” plan covers industrial development,
financial markets, human resources, public construction and social welfare,
and will be carried out over the next three years.
Because oil prices have fallen significantly, the consumer price index is
about to rise 0.95 percent from last year, much lower than the 1.88 percent
expected previously, Hong said.