Citigroup has revised upward its economic growth forecast for Taiwan to 9.1 percent this year, from its previous estimate of 8.7 percent made on Aug. 13, and said the economy would slow to a more “normal” pace of 4.2 percent next year.
In its latest Asia Macro and Strategy Outlook report released yesterday, Citigroup said the upgrade was supported by nation’s stronger-than-expected 12.53 percent GDP growth year-on-year in the second quarter, with the growth momentum remaining resilient in the third quarter.
Citigroup’s move followed Polaris Research Institute’s (寶華綜合經濟研究院) revision on Monday of its growth forecast for Taiwan to 8.52 percent this year, from its estimate of 6.82 percent made in June.
Last week, the Economist Intelligence Unit, the research unit of The Economist, also upgraded its growth forecast for Taiwan to 9.2 percent, compared with its 7.6 percent estimate made in July.
Citigroup, however, warned that the continued slow growth in developed economies would “put a damper on [Taiwan’s] burgeoning domestic recovery,” while “excessive liquidity globally will likely add to risks of an asset price bubble.”
Citigroup said it expected the central bank to raise policy rates by another 0.125 percentage points next week to curb housing prices in Taipei. It also revised its forecast for the NT dollar to trade at 31.60 per US dollar by the year’s end, from its previous estimate of 31.80.
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