The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday raised its forecast for GDP growth this year to 1.13 percent from an estimate of 1.05 percent in late October, on the back of stronger exports.
The upward revision put an end to nine straight cuts since August last year and came despite a weaker showing last quarter with the economy growing a mere 0.98 percent, lower than the 1.2 percent prediction, the DGBAS report showed.
“The nation’s economy has fared better, sustained by stronger exports as the inventory correction cycle proves less formidable,” DGBAS statistics division director Tsai Hung-kun (蔡鴻坤) said.
Robust sales figures by major technology firms such as Taiwan Semiconductor Manufacturing Co (台積電), MediaTek Inc (聯發科) and Chimei Innolux Corp (奇美電子) removed some potential problems this quarter and next year, Tsai said, attributing the improvement to healthy demand for advanced technology used on handset devices and tablet computers.
The statistics agency now expects the economy to grow 3.15 percent next year from this year, slightly higher than the 3.09 percent increase it forecast on Oct. 31.
Exports, which account for 75 percent of GDP value, may increase 2.5 percent this quarter year-on-year and accelerate to 4.15 percent next year, the report indicated.
Stronger external demand is expected to boost private investment, which is forecast to gain 9.09 percent this quarter from a year earlier, as firms buy new capital equipment to fill orders, the report said.
While the economy may have bottomed out in the last quarter, private consumption at home remains unusually weak, Tsai said.
Private consumption is expected to edge up only 0.14 percent this quarter after rising 0.89 percent last quarter, the lowest rate since the second quarter of 2009, the report said.
After seasonal adjustment, the component dented GDP by 0.28 percent during the July-to-September period and may take out an extra 1.84 percent this quarter, the report found.
“It is unusual for the reading to contract for two consecutive quarters in the second half of the year,” Tsai said.
DGBAS section head Joshua Gau (高志祥) pinned the blame on an increase in the jobless rate as more firms laid off workers or adopted unpaid leave to cope with falling business.
Unfavorable policy measures to increase health-insurance burdens and tax capital gains from stock investments also contributed to weak sentiment, Gau said.
The statistics agency expects inflationary pressures to slow going forward, easing to 1.87 percent this quarter, from 2.95 percent last quarter, and average 1.27 percent next year.
“Lingering uncertainty and weak demand will limit consumer price hikes,” DGBAS Minister Shih Su-mei (石素梅) said, adding that the agency expects oil prices to hover around US$102.4 a barrel next year from US$109.2 a barrel this year.
Liang Chi-yuan (梁啟源), chairman of the Taipei-based Chung-Hua Institution for Economic Research (中華經濟研究院), yesterday said the worst of Taiwan’s economic problems had passed and the country is expected to perform better next year.
The economy seemed to bottom out in August and began to improve in September, Liang said at a forum on economic recovery, citing the latest government statistics that show signs of improvement.
Although the European debt crisis and the slow recovery of the US economy might affect Taiwan’s economy, “there will always be solutions,” Liang said, adding that the public should have more confidence.
Additional reporting by CNA