Academia Sinica yesterday remained the most optimistic among the nation’s research bodies with a 4.73 percent growth forecast for Taiwan’s economy next year, higher than the 4.39 percent announced by the Directorate-General of Budget, Accounting and Statistics (DGBAS) last month.
The nation’s top research institute said GDP growth in the fourth quarter was expected to record a strong rebound of 7.17 percent from a year earlier, representing the first economic growth following five consecutive quarters of contraction.
“There’s good news about global ‘warming’ — the economy is warming up,” Ray Chou (周雨田), a research fellow who delivered the outlook report on behalf of the institute, told a media briefing yesterday.
The institute’s GDP forecast was closest to the “challenging” target of 4.8 percent set by the Council for Economic Planning and Development on Monday. While the global financial crisis roiled much of the economy this year, the international financial market and global trade are expected to gain momentum next year, Academia Sinica said in a statement.
“It is a fact that the nation is coming out of the economic slump,” Chou said.
Chou said that growth next year would mainly be driven by increased inventory buildup as businesses accelerate production to rebuild inventories to normal levels amid recovery.
“Private investment will move out of recession and is expected to see a year-on-year increase of 7.81 percent next year,” he said, adding that the figure could be an underestimate if inventory cycles were taken into account.
The inventory cycle refers to businesses slowing down inventory buildup during an economic slump and rebuilding it when the economy shows signs of recovery.
However, the nation’s economic recovery remains unsteady because the timetable for an economic cooperation framework agreement (ECFA) with China is not clear, Chou said. Furthermore, domestic spending still lacks steady growth momentum — the result of high unemployment, he said.
“The public should not be misled by such a high growth prediction and we have a responsibility to remind them that high economic growth cannot last forever,” Chou said.
Academia Sinica did not unveil its prediction for next year’s unemployment rate.
The institute said that exports of goods and services would grow 10.44 percent year-on-year next year, compared with a 9.55 percent contraction this year. Imports, meanwhile, will increase 11.74 percent year-on-year, up from a 13.59 percent fall this year.
On inflation, the institute said the consumer price index was expected to rise 1.14 percent year-on-year, compared with a 0.9 percent decline this year.
“Inflation has yet to be a problem for Taiwan,” Chou said, adding that consumer price growth was mild because of a real income contraction and high employment.
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