The government yesterday raised its GDP growth forecast for this year to 2.58 percent, 0.47 percentage points higher from the previous projection in August, bolstered by stronger exports.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) made the upward revision after the economy expanded 3.1 percent in the third quarter on the back of strong exports that soared 11.7 percent, more than doubling the projection at 4.43 percent.
“Inventory demand for electronic parts proved much stronger than expected and the growth momentum has not peaked yet,” DGBAS Minister Chu Tzer-ming (朱澤民) told a news conference.
Launches of new generations of smartphones by major international technology brands have spurred demand and the growing popularity of applications employing artificial intelligence and the Internet of Things (IoT) also lent a helping hand, he said.
Outbound shipments are expected to increase 6.6 percent in the current quarter, slowing from double-digit gains in the three previous quarters, the DGBAS report showed, more than offsetting the contraction in domestic demand by 0.82 percent.
Conservative levels of private investment, especially by semiconductor firms, weighed on domestic demand, Chu said.
Imports of capital equipment slumped 13.34 percent during the July-to-September period after firms actively acquired capital equipment in previous quarters, the report said.
“Firms tend to moderate the pace of purchases every few quarters but will resume building up their capability to remain technologically advanced,” DGBAS Director-General Yeh Maan-tzwu (葉滿足) said.
Semiconductor firms such as Taiwan Semiconductor Manufacturing Co (台積電) and Winbond Electronics Corp (華邦電) have indicated plans to keep advanced technologies in Taiwan, she said.
The nation’s exports are expected to grow by 4.51 percent next year with the global economy set for a stable expansion at the same pace this year, the report said.
The DGBAS also raised its forecast for GDP growth next year to 2.29 percent, 0.02 percentage points higher than the prediction in August, despite a relatively high base.
The economy is likely to gain more evenly next year, as the pay increase for government employees will help boost consumer confidence, and massive spending on infrastructure enhancement should stimulate investment interest, Chu said.
The DGBAS trimmed its forecast for inflation to 0.62 percent for this year in the absence of harsh climate conditions. The inflationary gauge might edge up 0.96 percent next year.
The report said downside risks for the economy include whether the government can effectively implement its budget plans and how China adjusts its economy, it said, adding that how the US Federal Reserve approaches its monetary policy could also weigh on the economy.
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