The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday raised its forecast for the nation’s GDP growth to 3.59 percent annually, from the 3.53 percent it forecast last month, citing improving momentum in exports and private consumption.
It was the third straight time the DGBAS revised upward its forecast for this year’s GDP growth since October last year, when the agency forecast a 3.09 percent growth rate.
The agency also forecast the nation’s economy would grow 3.26 percent year-on-year in the current quarter, after expanding 3.72 percent last quarter.
That would pave the way for a much-anticipated pay raise as the growth would meet the government’s requirement for the labor council to raise the nation’s minimum monthly wage to NT$19,047 from NT$18,780.
The government has said it would increase the wage only after the nation’s GDP grew more than 3 percent for two consecutive quarters.
Directorate-General of Budget, Accounting and Statistics Minister Shih Su-mei (石素梅) recently attributed the upward adjustment in the GDP forecast for this year to the steady global economic sentiment.
“We have seen the global economy show significant signs of recovery,” Shih told a press conference.
Earlier this month, IHS Global Insight — an independent economic and financial services firm — boosted its forecast for global economic growth this year to 2.6 percent, from 2.5 percent it forecast last month, signifying a further upturn in Taiwan’s exports sector, DGBAS section chief Joshua Gau (高志祥) said.
As a result, the DGBAS boosted its growth forecast for exports this year to 6.23 percent, from the 6.07 percent it previously forecast, Gau added.
Furthermore, private consumption may rise 1.86 percent this year, from the 1.83 percent forecast last month, as improving economic sentiment may help boost the nation’s securities market and strengthen consumer confidence, the report’s data showed.
Private investment is also expected to expand 7.37 percent this year, rebounding after it fell in the previous two years, statistics showed.
On consumer prices, the DGBAS said the nation’s headline inflation may rise 1.37 percent this year, from the 1.31 percent it forecast last month.
The DGBAS yesterday announced that it would only revise its forecast for Taiwan’s economy four times this year, instead of eight times.
The move raised concerns that the government agency was worried that continuous downward revisions of its growth forecast, which occured last year, may worsen its reputation and impose pressures.
However, the DGBAS said the change would see it fall in line with other major economies.