The government yesterday raised its economic growth forecast for this year to 2.98 percent, from the 2.82 percent forecast it made in February, on expectations that stronger private consumption and investment growth would offset softer-than-expected exports.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday also revised up its estimates for first-quarter GDP growth to 3.14 percent, from 3.04 percent, but revised down its reading for the final quarter of last year to 2.88 percent, from 2.95 percent.
“Domestic demand may support the nation’s GDP growth this year, while political uncertainty in some emerging countries may be a drag on global recovery,” DGBAS Deputy Minister Luh Dun-jin (鹿篤瑾) said.
Exports, which account for 70 percent of GDP, could grow a moderate 4.08 percent this year from last year, lagging the estimate of a 4.3 percent increase in global trade by the IMF, Luh said.
Not all industries benefit equally as the global recovery pans out, Luh said, adding that companies in the semiconductor, DRAM, solar energy and Internet of Things sectors appear to be the biggest beneficiaries so far on the back of technology advancement and market realignment.
The economic slowdown in emerging markets, especially China, has somewhat weighed on global growth and is unfavorable for Taiwan’s exports, Luh said.
Exports increased 3.89 percent in the quarter ended March, weaker than the estimate of 4.04 percent growth made last month, DGBAS data showed, driving the statistics agency to trim its forecasts for exports by US$700 million and imports by US$500 million for this year.
However, private consumption and investment may more than make up for the slack, rising 2.58 percent and 4.73 percent respectively to boost GDP growth, DGBAS section chief Joshua Gau (高志祥) said.
Consumer spending turned out stronger last quarter and the trend should be sustainable going forward, if the local bourse rallies higher, encouraging people to spend, Gau said.
Improving business and pay raises by some firms in different sectors should also lend support to private consumption, Gau said.
Meanwhile, major chipmakers, telecom operators and airlines have purchased new equipment and hired more employees amid a brighter business outlook, Gau said.
Chunghwa Telecom Co (中華電信), Taiwan Mobile Co (台灣大) and Far EasTone Telecommunications Co (遠傳電信) are soon to launch 4G long-term evolution (LTE) services, Gau said.
EVA Airways Corp (長榮航空) and China Airlines Ltd (中華航空) are expanding fleets and staff in anticipation of growing business demand, he said.
Inflation is forecast to stay benign at an average of 1.53 percent this year, after rising 0.79 percent last year, DGBAS data showed.