The nation’s economy might expand 2.3 percent next year, mildly softer than the 2.5 percent estimated for this year, as main trading partners might fare slightly weaker due to a lack of patent growth drivers and a high base of comparison, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The economic landscape ahead looks fair, allowing major economies to continue to recover, although their pace might differ, TIER economist Gordon Sun (孫明德) told a news conference.
The US and countries supported by raw materials are likely to perform better next year, while Europe, China and Japan might slow a bit in the absence of stimulus, the Taipei-based institute said.
Europe, China and Japan account for about 55 percent of the nation’s exports, limiting the growth forecast for next year in exports including services to 3.26 percent and imports to 3.11 percent, Sun said.
The projection suggests a steep pullback from 6.45 percent and 5.15 percent respectively for this year, as the global economy has this year recovered faster than expected, TIER said in a report.
The nation’s exports play a crucial role, as they amounted to 70 percent of GDP, it added.
The government has sought to lend a helping hand by adopting a NT$420 billion (US$13.9 billion) special spending program to improve infrastructure over the next four years, the report said.
Capital formation is expected to rise 2.95 percent next year, more than double this year’s increase of 1.2 percent, it added.
The institute forecast that government investment might increase 10.95 percent next year from 3.74 percent this year, while private investment is projected to gain 1.9 percent, compared with 0.6 percent this year.
Local semiconductor firms might restart acquisition of capital equipment to maintain technology leadership and meet business demand next year after practicing moderation in the second half of this year, the institute said.
That will help boost private consumption, which is expected to rise 2.1 percent next year, a slight improvement from a 1.96 percent increase this year, it said.
Rallies in local shares and wage hikes in the public and private sectors are favorable for consumer spending, Sun said.
TIER forecast that consumer prices would increase 0.8 percent next year, compared with 0.75 percent this year, while raw material prices might remain in a stable range.
Against that backdrop, the central bank might stand by its preference of “dynamic stability” in managing the local currency, Sun said.
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