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Academia Sinica revises Taiwan's growth rate up

Backed by expected stronger exports in the second half of the year and recovering domestic consumption, Academia Sinica yesterday revised Taiwan's economic growth rate this year up to 4.46 percent.

The nation's top research institute's last GDP forecast was 4.21 percent, which it published last December.

"As a whole, the growth in Taiwan's economy came from the continued expansion in exports, as well as moderately increased domestic consumption," said Wu Chung-shu (吳中書), a research fellow at Academia Sinica, at a press briefing yesterday.

The US economy is expected to pick up pace in the second half of the year, which would increase demand for Taiwanese exports, Wu said.

Exports of goods and services are estimated to increase by 7.63 percent, up from 5.91 percent in the previous forecast, while the imports of goods and services are expected to increase 4.81 percent, down from the 5.42 percent predicted previously, Academia Sinica's latest economic outlook report said.

Domestic consumption, bolstered by vibrant stock and real estate markets, will jump by 2.57 percent from last year, Wu said. The figure was only 1.45 percent last year due to the consumer credit abuse storm.

Domestic investment is expected to shrink on the political uncertainty brought about by the presidential and legislative elections next year, as well as an adjustment in the structure of the nation's industry, Wu said. It is estimated to increase by 2.4 percent year-on-year, down from last year's growth rate of 3.26 percent, he said.

Academia Sinica predicted consumer prices increased mildly for the first two quarters at 0.97 percent and 0.21 percent respectively. But Wu said consumer prices might rise by as much as 1.43 percent by the end of the year as oil prices are expected to remain at around US$65 per barrel in the second half.

The exchange rates of the New Taiwan dollar, meanwhile, will remain at around NT$33 against the US dollar for the rest of the year on a strong demand for Asian currencies, the researcher said.

In Taipei yesterday, the New Taiwan dollar weakened NT$0.057 to close at NT$33.142 on the Taipei Forex Inc, continuing a five-day decline.

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