Sat, Jul 26, 2014 - Page 13 News List

TIER raises the nation’s growth forecast to 3.28%

By Amy Su  /  Staff reporter

The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its economic growth forecast for Taiwan this year to 3.28 percent, from the 3.23 percent it estimated in April.

Gordon Sun (孫明德), director of the think tank’s economic forecasting center, attributed the upward adjustment to the institute’s optimistic outlook on private consumption in the second half of this year, which the institute estimated would grow 2.8 percent from last year.

Yet Sun kept a relatively conservative attitude toward private investments and exports, mainly on the impact of a slower than expected pace of global economic recovery.

The institute dropped its growth forecast for private investment sector to 3.32 percent this year, down 0.13 percentage points from the forecast in April.

The sector of exports is expected to rise 2.94 percent this year, a decrease of 1.08 percentage points from the previous forecast in April, the institute said in its quarterly report.

However, the timing of the US Federal Reserve raising its policy rates and geopolitical tensions around the world may be two major uncertainties for Taiwan’s economy in the upcoming months, Sun said.

The institute’s latest business climate gauge for the nation’s manufacturing sector also reflected polled companies’ cautious views, dropping 1.33 points to 103.61 points last month from May.

Although, in the service sector, the business climate gauge rebounded to 102.4 points last month, up 1.23 points from May, mainly driven by the bullish outlook of the nation’s brokerage houses and retailers, the data showed.

Meanwhile, the institute said the government’s plan to introduce a capital gains tax on property transactions may hit the nation’s housing market and trigger a potential property selling spree from now on through the first half of next year.

“The government’s real-estate capital gains tax plan could be a fatal attack to the housing market,” the institute’s associate research fellow Arisa Liu (劉佩真) said.

Since the government may launch the new tax plan in 2016 at the soonest, Liu said potential sellers may accelerate their pace, starting to sell off properties they hold from now on, through the first six months of next year.

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