The government yesterday raised its forecast for the nation’s economic expansion by 0.23 percentage points to 2.82 percent from the 2.59 percent it estimated in November last year.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) said the adjustment reflects improving exports and private consumption, but warned that the pace of the pickup in the economy is still unsteady and insufficient.
“The phrase ‘soft expansion’ is still suitable for describing the nation’s current economic scenario,” DGBAS Statistics Division Director Tsai Hung-kun (蔡鴻坤) told a press conference.
Global macroeconomic uncertainties remain for the nation’s economy, the DGBAS said, including the withdrawal of US quantitative easing (QE), the still sluggish sentiment among emerging markets and tougher competition from China.
According to the DGBAS’ latest forecast, the nation’s exports may increase 3.3 percent this year from a year earlier, which would be lower than the 4.5 percent growth of global trading volume estimated by the IMF for the third year in a row.
However, overall goods and service exports may rise 4.34 percent this year, higher than 3.41 percent growth forecast by the DGBAS in November last year.
Private consumption is estimated to grow 2.44 percent this year from last year, higher than the 1.72 percent growth previously estimated, while private investment is expected to grow 4.39 percent this year, with overall fixed asset formation expanding 3.25 percent year-on-year, DGBAS data showed.
The DGBAS also updated its forecast for growth of the headline inflation this year to 1.07 percent, from 1.21 percent estimated in November last year.
Taipei-based Standard Chartered Bank economist Tony Phoo (符銘財) is more optimistic about the nation’s GDP growth this year than the DGBAS, expecting the economy to expand by about 3.9 percent, driven by an anticipated recovery in global growth and steady demand for new technology products.
In addition, the expected increases in both public spending and investment, as the government seeks to bolster public confidence ahead of the nationwide elections by the end of this year, may also help raise economic sentiment in Taiwan, Phoo said in a note yesterday.
Separately, Taiwanese are growing more optimistic about their country's economic prospects, encouraged by gradual recoveries at home and abroad, a Cathay Financial Holding Co (國泰金控) survey showed yesterday.
The survey found that more people voiced optimism than pessimism over economic conditions by a 4.1 percentage point margin this month, reversing a 13.4 percentage point edge for the pessimists last month.
Survey respondents were also more optimistic than pessimistic toward Taiwan's future economic development by an 11.5 percentage point margin this month, up from a 2.4 percentage point edge in the previous month.
The two positive margins for this month were the biggest in 10 months, according to Cathay Financial.
Additional reporting by CNA