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TIER expects sound economic growth of 4.39% next year

The Taiwan Institute of Economic Research (TIER, 台經院) forecast steady economic growth next year, albeit at a slightly slower pace than this year.

Economic growth is expected to reach 4.39 percent next year, marginally lower than this year's forecast rate of 4.41 percent, mainly as a result of the US subprime mortgage crisis, which is expected to drag down global economic growth, TIER said.

TIER president David Hong (洪德生) predicted that oil prices would fall next year, which should help temper inflation after soaring prices this year.

Hung said that excluding unpredictable variables, such as typhoons, the consumer price index (CPI) would rise 1.9 percent next year -- higher than this year's forecast of 1.6 percent year-on-year growth but still under 2 percent.

He estimated that private sector consumption would expand 2.84 percent next year, higher than the 2.67 estimated for this year, thanks to brisk business and employment markets, higher minimum wages and a livelier bourse.

On bilateral trade, TIER forecast that exports would advance 9.38 percent next year, while imports would rise 10.33 percent, resulting in a trade surplus of US$258.7 million.

Meanwhile, public sector investment next year is expected to expand 4.31 percent year-on-year, mostly to meet rising demand for electricity, water and raw materials by state-run enterprises, petrochemical firms and infrastructure development projects.

Private sector investment is projected to top 4.75 percent next year as high-tech industries move to upgrade production methods and improve product quality, Hung said.
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