Taiwan Research Institute (TRI, 台灣綜合研究院) founder Liu Tai-ying (劉泰英) yesterday warned there could be another global financial crisis next year after the private think tank raised its GDP growth forecast for Taiwan to 4.95 percent for this year.
“The world may face another economic crisis next year amid the negative impact from the quantitative easing in the US,” Liu told a media briefing after hosting an economic forum yesterday.
The continuing sovereign debt problems in certain European countries and the rising number of serious natural disasters have increased uncertainty for the global economy as well as Taiwan’s economy, Liu said.
Photo: Chien Jung-fong, Taipei Times
Although the US government may end the second round of quantitative easing at the end of this month as planned, Liu said its negative impact on Asian economies would continue into the second half of the year, with emerging countries struggling between the inflow of speculative money and interest rate hikes.
This creates a chance that another global financial crisis would take shape by the end of the year, Liu said, but added that it was more likely to occur next year.
Wu Chung-shu (吳中書), chief economist at Chinatrust Commercial Bank (中國信託商業銀行), said it was too early to say whether the global economy would face another crisis next year, but many countries definitely have to look carefully into the balance between rising asset prices and rate hikes.
The Taipei-based think tank’s latest full-year GDP growth forecast of 4.95 percent was higher than the 4.24 percent estimate made in December last year, thanks to faster-than-expected economic expansion in the first quarter. However, the figure remains lower than the 5.06 percent growth forecast by the Directorate-General of Budget, Accounting and Statistics (DGBAS) last month.
“Sufficient demand from foreign countries for Taiwanese electronic products, as well as continuing growth in domestic employment and wages, will lead Taiwan’s economy to continue its mild pace of growth this year,” TRI president Wu Tsai-yi (吳再益) said.
The institute expects Taiwan’s private consumption to grow 3.93 percent this year, with full-year private investment rising 0.75 percent, data showed.
Hu Sheng-cheng (胡勝正), a research fellow at Academia Sinica, said the institute’s forecast basically met with market expectations, but the nation’s domestic demand remains insufficient to prevent dramatic ups and downs in economic growth.
It is better for domestic consumption to account for at least 60 percent of GDP, up from 55 percent this year, Hu said, citing the institute’s forecast data.
However, both Hu and Liu were optimistic about individual Chinese tourist visits to Taiwan, saying they would boost the nation’s domestic demand, either directly through consumption or indirectly through private investment.
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