Standard & Poor’s (S&P’s) yesterday said Taiwan’s GDP was expected to grow between 4.5 percent and 5 percent this year, a level equivalent to Hong Kong, but lower than in Singapore and South Korea.
Singapore’s GDP growth is projected to be between 5.5 percent and 6 percent, while South Korea will expand between 5 percent to 5.5 percent, S&P’s said in a report yesterday.
Taiwan’s Directorate-General of Budget, Accounting and Statistics revised last month the nation’s GDP growth forecast to 4.72 percent from its November estimate of 4.39 percent.
At the time, Premier Wu Den-yih (吳敦義) had said Taiwan’s GDP growth could reach 4.9 percent, higher than the global average of 2.9 percent and surpassing Japan, South Korea, Hong Kong and the US.
Meanwhile, the benchmark TAIEX could hit 8,800 points this year, S&P said. This was an increase of 7.5 percent from 8,188 points on Dec. 31 last year — the highest level in 18 months.
“Taiwan’s decision to open its borders to allow companies from mainland China to invest is a recent example of government reform that provides bilateral growth momentum,” the ratings agency said.
Growth this year is expected in all the Asia-Pacific economies, the result of a modest recovery in the US and Europe, the persisting effects of monetary and fiscal support mechanisms and gains in intraregional trade amid growing local demand, the report said.
China, India, Vietnam and Indonesia will continue to lead the pack this year, it said.
While economic prospects for the Asia-Pacific region are for the most part optimistic, some risks will continue to haunt recovery.
Inflationary concerns remain amid oil and commodity prices and higher asset prices. The latter recently showed a tendency to surge beyond levels warranted by demand-supply conditions, it said.
“Higher inflation could inspire faster rate hikes, which may in turn jeopardize the pace of the growth rebound,” it said. “Inflation may also deter recovery in private investment.”
As economic recovery in the US and Europe remains fragile, global economic stability will be a crucial factor in the revival of the Asia-Pacific, S&P said.
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