The nation stands to show stronger economic growth than main regional trade rival South Korea on a rebounding global demand for information technology products, Swiss banking giant UBS AG said yesterday.
Pu Yonghao (浦永灝), regional chief investment officer for Asia-Pacific at UBS Wealth Management, told a press conference that Taiwan’s growth and exports are forecast to improve this year on growing information-technology demand in Europe and the US, adding that the bank “remains confident” in its earlier prediction of 4 percent economic growth for the nation this year.
That level could be higher than growth in South Korea, even despite a slowdown in China’s economy, he said.
South Korea exports a big share of its products to China, leaving it more vulnerable to a Chinese slowdown, while Taiwan’s industry is considered a supply chain for the global market and will feel less of an impact from its neighbor, Pu said.
He also considers Taiwanese technology suppliers such as chip designer MediaTek Inc (聯發科) well-poised to capitalize on China’s new initiative to promote locally made electronics and a domestic IT industry.
Australia and New Zealand Banking Group Ltd (ANZ) also said yesterday that Taiwan’s economic outlook remained positive despite lower-than-expected export growth last month.
The Ministry of Finance on Monday reported exports grew 1.4 percent year-on-year, below market expectations of 4.5 percent and lower than the 6.2 percent export growth posted in April, while imports contracted by 2.3 percent year-on-year last month, much weaker than market expectations of 10.2 percent growth.
“Taiwan’s May trade data may have suffered from the distortions caused by fewer working days due to the different timing of holidays,” ANZ said in a statement. “We remain positive on the external outlook facing Taiwanese manufacturers.”
The bank said the decline may have reflected weakening investment sentiment among Taiwanese manufacturers amid uncertainty caused by opposition to trade pacts with China.
The upbeat UBS forecast came after the Directorate-General of Budget, Accounting and Statistics on May 23 said that the nation’s GDP could grow by 2.98 percent this year, up only slightly from the earlier its prediction of 2.82 percent made in February.
Local economists said the agency’s latest forecast is conservative because the economy is likely to grow at a faster rate based on relatively strong consumption and investment in the domestic economy.
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