The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday raised its forecast for GDP growth this year to 2.42 percent, from the 2.29 percent increase it projected in November last year, citing a fair global economic landscape.
The revision came after the nation’s economy expanded 2.86 percent last year, DGBAS Minister Chu Tzer-ming (朱澤民) said.
“I am optimistic that the economy will continue its current course of stable expansion” as global GDP is likely to grow faster than last year, Chu told reporters.
The uptrend bodes well for demand for semiconductor and machinery products, he said.
Exports, the main growth driver of the economy, increased 13.22 percent last year and are forecast to rise at a milder pace of 4.54 percent this year given a higher comparison base, Chu said.
Imports are forecast to expand at a faster pace of 6.98 percent this year, as local firms increase capital equipment investment after belt-tightening moves last year, he said.
Private investment slid into the negative zone over the past six months due to conservative corporate spending, he said.
Private consumption is expected to contribute more this year after a pay raise of 3 percent for government employees, Chu said, adding that many private companies have taken similar steps.
The pay increase in the public and private sectors could push up GDP growth by 0.64 percentage points a year, Chu said.
Private consumption is forecast to increase 2.45 percent this year, while government consumption is expected to pick up 1.08 percent, the DGBAS report said.
The consumer price index is forecast to rise 1.21 percent, while the wholesale price index is expected to gain 0.62 percent, aided by a stronger New Taiwan dollar, which helps absorb oil and raw materials price hikes, Chu said.
The agency expects crude oil prices to average US$61.7 a barrel this year, an increase of US$7.9 a barrel, compared with its previous estimate in November, the report said.
The agency did not factor in equity corrections across global markets, saying the recent pullback is harmless if it goes away soon.
“The correction is likely short-lived,” Chu said.
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