Wed, Jul 23, 2003 - Page 1 News List

Think tank raises its forecasts for economic growth


A private think tank yesterday revised upward its economic growth forecast for the nation this year, citing a pick-up in the global economy and a revision of assessments about the impact of SARS.

The Taiwan Institute of Economic Research (台經院) raised its economic growth forecast to 3.53 percent this year from the 3.02 percent it predicted in April, indicating that the nation's economy is expected to bottom out in the second half of the year.

"Since the outbreak of SARS was brought under control, we predict the nation may achieve 4.55 percent and 4.72 percent growth in the third and fourth quarters respectively," Wu Rong-i (吳榮義), president of the institute, said at a press conference.

The nation's economy grew 1.52 percent in the second quarter, when the country was hardest hit by the epidemic.

Wu based his optimism on increased government spending, citing the NT$50 billion special budget for SARS relief, the NT$77.7 billion budget for the expansion of public construction projects, the NT$500 billion budget for new public construction projects, and the real estate-backed securitization plan.

The institute now expects growth in government investment of 4.2 percent against a decline of 3.72 percent projected earlier, with private investment at 1.96 percent instead of 2.71 percent.

Growth in exports, including goods and services, is now expected at 7.54 percent for the year, up from the 7.18 percent forecast earlier, while the import growth forecast was lowered to 7.04 percent from 8.21 percent.

The institute expects inflation of 0.09 percent, instead of the 0.06 percent forecast previously, with wholesale price increases estimated at 2.23 percent rather than 3.54 percent.

Meanwhile, Wu said the New Taiwan dollar could appreciate against the US dollar in the second half of the year, but not dramatically. The institute has forecast the average exchange rate of the local currency to the greenback for this year at NT$ 34.57.

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