The Taiwan Institute of Economic Research (TIER, 台經院) said yesterday that rising fuel prices meant greater uncertainty for its GDP projections this year, despite public infrastructure projects announced by the government to boost domestic demand.
“The actual effect that the government’s investment in public infrastructure will have on Taiwan’s economic growth will not likely be felt until next year,” TIER president David Hong (洪德生) said at a press conference yesterday.
Hong’s remarks came after Chen Tain-jy (陳添枝), chairman of the Council for Economic Planning and Development (CEPD), said on Tuesday that government plans to increase investment in public infrastructure and expand domestic demand would boost GDP growth between 0.51 percent and 0.72 percent this year.
With average international crude oil prices rising to US$99.06 per barrel last month from US$60.82 per barrel a year ago, TIER said the nation was facing increasing inflationary pressures.
In addition, the rise in prices of natural gas, rice and sugar have also had an impact on domestic consumption.
The Taipei-based institute said that every 10 percent rise in oil prices would increase the nation’s consumer price index by 0.33 percentage point this year.
Hong said he doubted that many public infrastructure projects could be realized this year.