Fri, Dec 20, 2019 - Page 12 News List

GDP growth to slow to 2.44% in 2020: CIER

MODERATE GROWTH:Private investment would drive growth next year, while external trade could be hampered by lingering US-China trade tensions, the think tank said

By Crystal Hsu  /  Staff reporter

The nation’s economic growth is forecast to moderate to 2.44 percent next year after expanding by an estimated 2.54 percent this year, as the global economy remains sluggish, limiting room for a more robust showing, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.

Private investment would supply the growth momentum for next year, as it has done this year, thanks to increasing deployment of 5G networks and continued trade rerouting, the Taipei-based think tank said.

Domestic demand would contribute 2.17 percentage points to GDP growth, while external trade would account for only 0.27 percentage points, it said.

Although the US and China have agreed on a “phase one” trade deal, differences remain over China’s subsidy program and other issues, CIER president Chen Shi-kuan (陳思寬) said, advising local firms to watch out for unfavorable twists.

A CIER survey showed that 76 percent of local firms said the US-China trade dispute has had a negative impact on their business, Chen said.

China, which has kept its GDP growth above 6 percent this year, might see growth drop below this mark next year for the first time since 1991, Chen said, citing estimates by international research bodies.

Credit risks would also heighten, she said.

Similarly, the US is forecast to see GDP growth of 2.06 percent next year, decelerating from an estimated 2.31 percent this year, CIER said.

That bodes ill for Taiwan, as more than 50 percent of its outbound shipments go to the world’s two largest economies.

Economic slowdown is also expected to hit the eurozone, which is forecast to see GDP growth of 1.1 percent next year, compared with an estimated 1.42 percent this year, CIER said.

That said, the institute raised its growth forecast for Taiwan from 2.33 percent to 2.54 percent for this year, citing stronger external demand and private investment.

Taiwanese semiconductor and Internet equipment suppliers appear to be the biggest beneficiaries, it said.

CIER expects the New Taiwan dollar to stay virtually flat next year, averaging NT$30.94 against the US dollar, from NT$30.93 this year.

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