The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) on Friday raised its forecast for Taiwan’s GDP growth this year to 2.33 percent, due to higher-than-expected investment growth.
That was 0.27 percentage points higher than its previous forecast of 2.06 percent in July.
The institution revised its forecast, as the economy grew 2.12 percent annually in the first half of the year, which was better than its original projection of 1.7 percent, thanks to a 2.4 percent year-on-year gain in the second quarter, CIER Economic Forecasting Center director Peng Su-ling (彭素玲) told a news conference in Taipei.
Despite headwinds, including a slowdown in the global economy and uncertainty from trade tensions, the nation’s investments kept rising this year, due to local technology companies, especially in the semiconductor sector, Peng said. Also, more Taiwanese firms with overseas operations have applied to return home, she said.
CIER said it expects the growth of fixed capital formation for the whole of this year to reach an eight-year high of 6.99 percent, up from its July projection of 6.36 percent, which would lift economic growth this year by 1.45 percentage points, Peng said.
The momentum is expected to continue next year, but investment growth is forecast to decelerate to 4 percent due to a high comparison base this year, she said.
Although the nation’s exports contracted 2.5 percent annually in the first nine months, the decline narrowed to 0.79 percent in the third quarter, compared with a decline of 4.17 percent in the first quarter and 2.7 percent in the second quarter, Peng said.
Exports are likely to rebound with an annual gain of 6.02 percent in the fourth quarter, but might drop 0.33 percent for the whole of the year, she said.
In the first half, Taiwan’s economy expanded 2.12 percent year-on-year, and it is forecast to expand 2.4 percent in the third quarter and 2.64 percent this quarter, CIER said. The second half is the high season for consumer electronic devices, which should benefit Taiwanese firms’ global supply chains, it said.
For next year, the institute forecast that the economy would remain flat at 2.34 percent, as investment growth would slow.
The institute holds a conservative outlook for exports next year, as the economies of the nation’s two largest trading partners — the US and China — might lose steam.
CIER’s forecast differed from that of the Directorate-General of Budget, Accounting and Statistics, which in August predicted economic growth would accelerate from 2.46 percent this year to 2.58 percent next year once the bulk of investment pledges by returning Taiwanese firms materialize.
Handset camera lens maker Largan Precision Co (大立光) on Sunday reported a 6.71 percent year-on-year decline in revenue for the third quarter, despite revenue last month hitting the highest level in 11 months. Third-quarter revenue was NT$17.68 billion (US$581.2 million), compared with NT$18.95 billion a year earlier, the company said in a statement. The figure was in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$17.9 billion, but missed the market consensus estimate of NT$18.97 billion. The third-quarter revenue was a 51.44 percent increase from NT$11.67 billion in the second quarter, as the quarter is usually the peak
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Pegatron Corp (和碩), a key assembler of Apple Inc’s iPhones, on Thursday reported a 12.3 percent year-on-year decline in revenue for last quarter to NT$257.86 billion (US$8.44 billion), but it expects revenue to improve in the second half on traditional holiday demand. The fourth quarter is usually the peak season for its communications products, a company official said on condition of anonymity. As Apple released its new iPhone 17 series early last month, sales in the communications segment rose sequentially last month, the official said. Shipments to Apple have been stable and in line with earlier expectations, they said. Pegatron shipped 2.4 million notebook
RSS