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Taiwan Institute of Economic Research adjusts forecast for GDP down to 4.07%

The private-run Taiwan Institute of Economic Research (TIER, 台經院) yesterday cut its GDP growth forecast for Taiwan to 4.07 percent, from the 4.11 percent it predicted in November, in light of likely slower growth in the US and the EU.

But the institute adjusted upward its GDP growth estimate for last year to 4.25 percent from 4.01 percent as a result of a robust 13.09-percent increase in exports in the third quarter.

TIER said that exports this year should increase by 5.51 percent -- only half of last year's forecast growth rate.

As the consumer credit problem is expected to ease further, domestic consumption would see 2.83 percent growth, up from 1.36 percent last year, TIER said.

The institute also released its reading on the leading industry index. Its business climate index of the service industry increased 2.76 points to 109.75 last month.

TIER added that the results of its survey on manufacturing outlook showed that 38 percent of the companies polled expected the economy to improve in the next six months, up from 30 percent a month earlier. Meanwhile, 49 percent held a neutral view, a decline from 56.4 percent in the previous month.
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