Academia Sinica predicts stable 2007 GDP growth

By Jessie Ho  /  STAFF REPORTER

Sat, Dec 23, 2006 - Page 12

The nation's economic growth is expected to slow down next year, affected by an overall cooling global economy that could influence exports of Taiwanese goods, Academia Sinica said yesterday.

But with domestic demand recovering, the nation's GDP growth will still reach 4.21 percent next year, a slight decline from 4.32 percent this year, said Wu Chung-shu (吳中書), a research fellow at Academia Sinica, at a press briefing yesterday.

Academia Sinica, one of the nation's leading research institutes, projected a more optimistic GDP forecast for next year compared with other research institutes and authorities.

Polaris Research Institute (寶華經濟研究院) predicted that Taiwan's GDP next year would reach 4.2 percent, the government's Directorate General of Budget, Accounting and Statistics (DGBAS) projected 4.14 percent, the Chung Hua Institution for Economic Research (中經院) put the figure at 4.13 percent, and the Taiwan Institute of Economic Research (台經院) announced a forecast of 4.11 percent.

Domestic consumption, which was hit hard by the credit abuse problem this year, is expected to grow 3.27 percent next year, up from an estimated 1.49 percent this year, Wu said.

Domestic investments will also expand, with the growth rate rising to 3.18 percent next year from an estimated 1.81 percent this year, Wu said.

Exports would only increase 5.91 percent next year, from 10.42 percent this year and imports would rise 4.58 percent, from 6.7 percent this year, he said.

Given a weakening US dollar and a sluggish housing market, the New Taiwan dollar is expected to appreciate from an average of NT$32.53 this year to NT$32.16 next year.

The local currency dropped NT$0.012 to close at NT$32.565 yesterday.

Consumer prices are forecast to rise 1.72 percent next year, after climbing 0.58 percent this year, Wu said.

Oil prices, the US housing market, cross-strait relations and domestic politics are uncertainties that may also influence the nation's economy, Wu said.