Tue, Oct 03, 2017 - Page 12 News List

DBS stands by yearly growth forecast of 2.4 percent

Staff writer

DBS Bank yesterday stood by its yearly GDP growth forecast of 2.4 percent, saying it expects the economy to expand by 2 percent in the third quarter and 2.5 percent in the fourth quarter.

The nation’s GDP grew 2.4 percent in the first half of the year, it said.

“Experts are expecting a cyclical rebound in the next couple of quarters... Electronics exports came off a peak in the second quarter due to a low season and a high base effect,” it said.

However, seasonal demand in the sector is expected to take effect, as Apple Inc released its new iPhones in the middle of last month, DBS said.

The OLED-screen iPhone will be available in mass quantities at the end of this year, boding well for the outlook of Taiwan’s electronics exports this quarter and early next year, the Singaporean lender said.

Non-electronics exports have been increasing since the second quarter, thanks to stabilizing international commodity prices and improving regional trade flows DBS said, .

The global economy remains on track to recovery, despite earlier concerns about US trade protectionism, European elections and China’s slowdown, it said.

Investment is also expected to pick up, albeit slightly, it added.

Gross fixed capital formation contracted 0.3 percent in the second quarter, mainly due to a 1 percent decline in private investment, the bank said.

However, when exports regain momentum, manufacturers are likely to expand capital spending again and private machinery investment will recover accordingly, it said.

Private construction investment has shown signs of bottoming out, the lender said, adding that construction building permits have stopped their decline and have been increasing since the first quarter, as property prices bounced back.

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