The nation’s GDP growth may accelerate to 4.3 percent next year, from an estimated 3 percent this year, on the back of improving global demand for mobile and computer devices, Standard Chartered Bank Taiwan said yesterday.
Taiwan’s export-focused economy has started to show a steady rebound, as seen by the latest economic data, and the momentum is set to gather more strength next year, Taipei-based Standard Chartered Bank economist Tony Phoo (符銘財) said.
Phoo attributed his optimism to a stabilizing economy in the West and faster expansion in China.
The British banking group forecast the US economy is likely to pick up 2.5 percent next year, while the eurozone may grow by a moderate 1.3 percent and China by 7.4 percent.
The macro-environment is favorable for Taiwan, home to the world’s top manufacturers of chips, computers, smartphones and critical components, the economist said.
Healthy purchasing managers’ indices abroad lend support to the upbeat sentiment, Phoo said, adding that Taiwan’s lackluster economic performance so far this year would lower its comparison base and make it easier to achieve a stronger bounce next year.
The projected 4.3 percent GDP growth would lag behind Singapore, with an expected advance of 4.8 percent next year, but would outpace South Korea at 3.8 percent and Hong Kong at 4 percent, Standard Chartered Bank said regarding Taiwan’s three main trade rivals.
The brightening landscape would drive companies to increase investment, boding well for the job market and consumer spending, Phoo said.
The continued rise in Chinese tourists will help boost domestic demand, though their contribution to the GDP remains modest, the economist said.
The lingering US fiscal debt standoff and China’s likely overheating economy pose the biggest downside risks next year, Phoo said.
Unfavorable events arising from the political deadlock in the US may unsettle global financial markets as seen following the Standard & Poor’s downgrade of its credit ratings in 2011 and during the recent partial federal government shutdown, the economist said.
China, on the other hand, may introduce tightening measures to rein in an overheating economy once its GDP growth hits 8 percent, denying companies and consumers the liquidity to expand, Phoo said.
Standard Chartered Bank maintains its estimate of 3 percent growth for Taiwan’s GDP this year and the last quarter, he said.
The Directorate-General of Budget, Accounting and Statistics is slated to update its forecast later this week.