The Taiwanese economy would grow 2.2 percent next year, outperforming major neighboring economies, Standard Chartered Bank said at a news conference in Taipei on Thursday.
The nation might continue to benefit from order transfers and trade rerouting to avoid tariffs imposed by Washington on Chinese goods, senior economist for East Asia Tony Phoo (符銘財) said.
The Singaporean economy is forecast to grow 1.4 percent next year, while Hong Kong’s is expected to contract 1.5 percent, the bank said.
Taiwan is likely to run neck and neck with South Korea, it added.
The bank was less optimistic than the Directorate-General of Budget, Accounting and Statistics, which last month raised its GDP growth forecast for next year from 2.58 percent to 2.72 percent.
Standard Chartered would upgrade its projection if needed, as an increasing number of Taiwanese firms increase the share of their production at home to avoid the trade conflict, Phoo said.
The local semiconductor industry enjoys robust demand from global clients and many chip companies have poured funds into adopting high-end production processes, he said
A growing IC industry would help propel the overall economy, as the semiconductor industry is the backbone of Taiwan’s manufacturing sector, he added.
Taiwanese firms have over the past several years channeled funds to Southeast Asian markets to cut their economic dependence on China and take advantage of the fast-growing economies, Phoo said, citing Ministry of Economic Affairs data.
China now accounts for less than 50 percent of Taiwan’s total investment, down from a recent peak of 70 to 80 percent, he said.
Taiwan’s GDP growth should hit 3 percent in the first half of next year before slowing in the second half due in part to the base effect, Phoo said.
The second-half performance would depend on how the US-China trade dispute pans out and how the US economy unfolds ahead of the US presidential election, he said.
The Taiwanese economy should grow 2.4 percent this year, Phoo said, lower than the government’s estimate, but up from the bank’s projection in August of 2.1 percent.
Standard Chartered forecast that the global economy would grow 3.3 percent next year, picking up pace from an anticipated 3.1 percent increase for this year, on the back of ample liquidity, looser monetary policies, growth momentum in Asia and greater demand for electronic devices.
The bank said it is confident that trade ties between Washington and Beijing would improve and help boost the global economy.
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