Taiwan’s economy might expand 2.49 percent this year, marginally higher than a previous forecast of 2.45 percent, as the first six months of the year proved better than expected, despite trade tensions between the US and China, a Taipei-based think tank said yesterday.
The business outlook of companies turns conservative when they are concerned about rising uncertainty in the marketplace, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said.
“The economic landscape looks less smooth going forward, as evidenced by softening sentiment among local firms,” TIER economist Gordon Sun (孫明德) told a news conference.
This year might see a 4.32 percent increase in exports, up 0.49 percentage points from April estimates, and a 4.45 percent increase in imports, up 0.53 percentage points, the institute said.
New technology applications could continue to benefit Taiwan, home to the world’s largest contract makers of electronic parts, Sun said.
While demand for mobile gadgets and cryptocurrency mining has shown signs of slowing, shipments of machinery equipment remains solid, the institute said, adding that high prices of oil and raw materials would lend support to non-technology exports.
TIER expects private consumption to gain 2.23 percent this year, an increase of 0.14 percentage points from its forecast three months earlier.
The second half of the year is the peak sales season for domestic retailers and restaurants, whose business improved in the first six months, while active equity trading helped boost sales, the institute said.
It has raised its growth forecast for private investment by 0.15 percentage points to 2.95 percent for this year, but revised its forecast for overall capital formation down by 0.09 percentage points, due to a slower pace in the public sector.
The institute’s monthly survey showed that companies are less upbeat, with only 26.4 percent of firms having a rosy view of business over the next six months, down 4.5 percentage points from one month earlier, while companies with a dim view increased from 11.1 percent to 15.9 percent and most other firms held a neutral outlook.
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