Cathay Financial Holding Co (國泰金控) yesterday raised its GDP growth forecast for the nation to 4.23 percent this year, from a 3.9 percent expansion estimated last December, as private consumption proved stronger so far this year.
“Major economic data so far this year beat our forecast three months ago,” Achilles Chen (陳欽奇), a manager at the group’s economic research department, said by telephone.
Chen noted custom-cleared exports expanded by double digits year-on-year last month despite a low season, boding well for the nation’s export-reliant economy in the coming six months.
On the domestic front, commercial sales hit a new high in January, while retail and dining businesses increased 22 percent and 15 percent respectively from their year-earlier levels.
The figures showed private consumption replaced external demand in bolstering the economy, Chen said.
Cathay Financial expects GDP to expand 2 percent this quarter, higher than the 1.96 percent growth predicted by the Directorate--General of Budget, Accounting and Statistics last month.
The group put the growth rate at 1.94 percent for the second quarter, also higher than the government agency’s 1.82 percent estimate.
While Cathay Financial does not include consumer prices in its GDP forecast, Chen said the public by and large were feeling a stronger pinch than the latest official gauge at 1.33 percent.
“About 80 percent of respondents felt the hike in consumer prices should have exceeded 1.5 percent,” Chen said.
Cathay Financial limits its GDP forecast to six months ahead because of concerns over longer-term uncertainty.