Foreign banks have revised downward their economic growth forecasts for Taiwan this year, citing uncertainties in external demand that may linger on in the near term and limit the nation’s growth momentum.
“Given the disappointment in recent macro[economic] data, and the lingering uncertainty in near-term global demand conditions, we have revised down Taiwan’s GDP growth forecast,” Hong Kong-based JPMorgan Chase economist Grace Ng (吳向紅) said in a report on Wednesday.
Ng said she expected Taiwan’s economy to expand 3.3 percent this year, down from her previous estimate of 4.2 percent growth.
The government, which in February forecast the economy would grow 3.59 percent for this year after GDP grew 1.25 percent last year, is scheduled to update its GDP growth forecast tomorrow.
JPMorgan’s downward adjustment came after the latest official data showed growth in export orders contracted 6.6 percent year-on-year last month, and was down 1.7 percent in the first quarter, while industrial production declined 3.28 percent year-on-year last month and rose only 0.78 percent in the first quarter.
A further downside risk is added by domestic commercial sales declining 0.7 percent year-on-year last month and increasing by only 0.4 percent in the first quarter, data showed last week.
Hong Kong-based Credit Suisse AG economist Christiaan Tuntono said in a separate report on Wednesday that Taiwan’s GDP growth in the first quarter would likely be weaker than the bank’s original forecast of mid-3 percent.
“Unless growth in the coming quarters rebounds, for which we do not see convincing signs yet, we believe there is rising downside risk to the government’s and our 2013 GDP growth forecast of around 3.4 percent to 3.6 percent as well,” Tuntono said.
The two economists said the latest data suggested Taiwan’s export and industrial sectors lost momentum early in the year, which negatively affected domestic commercial sales.