The government yesterday raised its GDP growth forecast for this year to 2.11 percent, from a 2.05 percent projection in May, bolstered by a stable global economic recovery.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) made the upward revision after the economy expanded by a revised 2.13 percent in the second quarter and by 2.66 percent in the first quarter.
GDP is expected to rise 2.27 next year, a DGBAS report said.
“We expect exports and private consumption to fare better than the previous estimate, although the adjustment is marginal,” DGBAS Minister Chu Tzer-ming (朱澤民) told a news conference.
Exports, which account for 70 percent of the nation’s GDP, are forecast to increase 9.35 percent annually this year, faster than the 8.57 percent pickup estimated in May, Chu said.
Local electronics component makers have been ramping up production to meet demand by major technology brands that are due to launch next-generation mobile devices this month and next month, he added.
However, heavy dependence on sales of electronic products, which drive more than 30 percent of outbound shipments, has rendered the nation vulnerable to global technology cyclical corrections.
Although imports of capital equipment have slowed over the past few months, none of the local technology firms have indicated plans to cut capital expenditure, Chu said, suggesting that the slackening might have more to do with delayed spending or the absence of low-base benefits.
The agency raised its growth forecast for private consumption by 0.05 percentage points to 1.89 percent for the year, citing a slightly lower unemployment rate and a healthy outlook for the job market.
A stable job market is crucial for private consumption, which gained 2.05 percent last quarter, faster than the forecast of 1.83 percent made in May, the report said.
Rallies on the local bourse have lent support to private consumption, as stock turnover surged 26.32 percent from a year earlier, restaurant revenue gained 2.55 percent and the number of outbound travelers increased 7.05 percent, more than offsetting a drop in retail sales and new car sales.
However, private investment proved softer than expected, contracting 0.98 percent in the April-to-June period from a year earlier, Chu said.
Local semiconductor makers and airlines refrained from active capital equipment purchases, while confidence on the part of developers and builders has remained weak.
Private investment is expected to increase 1.7 percent annually this year, slower than the 1.95 percent growth the DGBAS predicted three months earlier, the report showed.
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