Thu, Feb 15, 2018 - Page 12 News List

DBS Bank raises Taiwan growth forecast to 2.8%

‘TAILWINDS’:Domestic outlook should improve on the back of a better labor market, wage hikes and other positive factors, DBS economist Ma Tieying said

By Crystal Hsu  /  Staff reporter

DBS Bank Ltd has raised its GDP growth forecast for Taiwan to 2.8 percent this year, from a previous forecast of 2.5 percent, as the nation’s export-oriented economy benefits from a better-than-expected global cyclical recovery.

The nation’s economy grew 2.84 percent last year, the strongest in more than three years and beating the Singaporean lender’s forecast of 2.4 percent, thanks to high exposure to external trade and its deep participation in the global technology supply chains, DBS economist Ma Tieying (馬鐵英) said in a report released on Tuesday.

Growth momentum would be strong this quarter in light of healthy economic indicators, Ma said.

Although the sales figures for Apple Inc’s iPhone X disappointed, demand for older iPhone models — such as the iPhone 7 and iPhone 6s — appeared to be stronger than expected, thanks to price cuts, while demand for semiconductors and other electronics components has increasingly gained diversity due mainly to the fast-growing popularity of the Internet of Things, artificial intelligence and automotive businesses, Ma said.

On the domestic front, the outlook should also turn slightly better this year, judging from a steady improvement in the labor market, wage hikes, the bottoming-out of the property sector and an increase in infrastructure spending by the government, she said.

“Given that the cyclical tailwinds remain strong in the short term, we revise our 2018 GDP growth forecast to 2.8 percent and keep the 2019 forecast unchanged at 2.4 percent,” Ma said.

The bank’s forecast is higher than the 2.42 percent predicted by the Directorate-General of Budget, Accounting and Statistics on Tuesday.

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