US investment bank Lehman Brothers yesterday revised upward its economic growth forecast for Taiwan this year, retaining a positive outlook for next year as the nation's economy seems to bottom out.
In its report titled Taiwan: Downside Looks Limited, Lehman Brothers raised its GDP growth forecast for Taiwan from 3.9 percent to 4.2 percent, the company said yesterday.
Real GDP growth is expected to pick up slightly to 4.1 percent in the first quarter of this year from 4 percent in the previous quarter, as the strength in net exports should have more than offset weakness in domestic demand, Lehman Brothers said.
Looking ahead, the investment bank saw limited downside, given an outlook of continued robust growth in China, Taiwan's top export destination, and fairly solid growth in other major markets, supported by an easing of the glut in the global high-end electronics industry, it said.
Businesses and households appeared to have become accustomed to persistent political uncertainty, it said.
As such, there are more upside than downside risks to growth forecast in the medium to longer term as the political environment could improve as elections draw closer, it said.
Meanwhile, Taiwanese investor confidence continued to weaken amid a conservative outlook for the investment environment, a bimonthly survey released by JF Asset Management Taiwan yesterday showed.
The survey, which polled 3,242 people aged over 20 between April 20 and April 30, showed that the investment confidence index has dropped for the second time to 106.1, down 2.8 points from the last survey in March.
The result showed that people were increasingly pessimistic about the future as the rise in income could not match the pace of markups in commodities and property prices, company president Judy Shih (
On the local bourse yesterday, the benchmark TAIEX dropped 0.69 percent, or 55.53 points, to 7,975.03 on thin trading.
Turnover was NT$68.764 billion (US$2.06 billion), compared with NT$80.595 billion the previous day, Taiwan Stock Exchange data showed.
Dealers attributed the lower turnover to prevalent uncertainty over cross-strait relations and worries over a possible correction in international markets following recent gains.
Foreign institutional investors bought a net NT$3.01 billion in shares yesterday, while domestic institutional investors bought a net of NT$750 million in shares, stock exchange tallies showed.
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