Academia Sinica yesterday raised its forecast for the nation’s GDP growth for this year from 2.18 percent to 2.64 percent on the back of stronger external demand, which it said could extend into next year, although at a milder pace.
The Taipei-based institute set the growth rate for next year at 2.43 percent, the highest among all forecasts.
“Despite lingering uncertainty, the landscape looks fair ahead,” Academia Sinica research fellow Ray Chou (周雨田) told a news conference.
Economic improvement in advanced nations is forecast to gain further momentum next year, boding well for Taiwan’s exports of electronic components, the institute said.
Moreover, Apple Inc’s iPhone X and electric vehicles would continue to gain prevalence, ramping up the business of local firms in their global supply chains, Academia Sinica economics researcher Kamhon Kan (簡錦漢) said.
The latest economic barometers are all in expansion mode with better-than-expected figures, meriting upward revisions of growth rates for this quarter and next year, Academia Sinica said.
Exports and imports of goods and services are forecast to rise 5.04 percent and 5.9 percent respectively next year, following increases of 7.16 percent and 5.78 percent this year, the institute said.
Global trade would continue to swell, but the ongoing economic rebalancing in China might weigh on Taiwanese firms due to their heavy dependence on that market, it said.
Private consumption is set to rise 2.15 percent this year and advance 2.12 percent next year, the report said.
Salary increases would give households more money to spend and push up retail prices, Chou said.
The government is to raise wages for civil servants, teachers and military personnel by 3 percent next year and many firms have announced plans to follow suit.
Private investment is projected to increase by a marginal 0.08 percent this year after major firms turned cautious about capital expenditure in the first three quarters, but could increase by 2.8 percent next year on the back of demand for new technology and a lower comparison base, the report said.
However, there are also potential downside risks, including interest rate increases by the US Federal Reserve, the institute said.
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