The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday maintained its economic growth forecast for next year at 3.6 percent, but downgraded its prospects for this year to 1.19 percent from 1.52 percent, citing the nation’s prolonged poor economic conditions.
“The appreciation of the New Taiwan dollar against other currencies is expected to reduce exports,” director of the CIER’s center for economic forecasting Liu Meng-chun (劉孟俊) said at an economics seminar.
The Taipei-based institution forecast the NT dollar would trade at an average of NT$29.1 against the US dollar next year, compared with its previous estimate of NT$29.37.
For next year, CIER lowered its exports growth forecast to 5.26 percent from its previous estimate of 5.57 percent and trimmed its imports growth forecast to 4.22 percent from 5.02 percent.
This year, exports are expected to rise 0.08 percent, compared with 4.45 percent growth last year, while imports may contract 1.54 percent following a decline of 0.47 percent last year, according to the institute.
CIER is also bearish about the nation’s outlook for private consumption and private investment next year, citing the implementation of a government policy to demand registration of actual housing prices and the Cabinet’s plans to cap both central and local governments’ debt ceilings.
The unemployment rate is expected to reflect the gloomy economic conditions this year and climb further next year, Liu said. However, inflation is forecast to be milder next year because global crude oil prices are expected to fall, he added.
Commenting on CIER’s 3.6 percent growth forecast for next year, National Central University economics professor Chu Yun-peng (朱雲鵬) said the figure presented a rosier outlook ahead, but he said that the forecast would be possible only if both the US and the EU see steady growth in their economies.
Taiwan Academy of Banking and Finance (台灣金融研訓院) president Cheng Cheng-mount (鄭貞茂) said economic growth next year was likely to reach 3 percent or more.
“The economic conditions this year have been largely disrupted by local policy changes, but such influences are likely to play a milder role next year,” Cheng said.
Nevertheless, CIER chairman Liang Chi-yuan (梁啟源) said he believed the worst was over, adding that the US “fiscal cliff” would be solved eventually and the European debt crisis is under control.