Propelled by the robust growth in exports, Taiwan’s economy is forecast to rise 8 percent in the second quarter and 7.2 percent for the full year, Citigroup Taiwan Inc said yesterday.
“Taiwan’s economic growth forecast for this year will likely be higher than the Taiwan Institute of Economic Research’s latest estimate of 5.11 percent,” Cheng Cheng-mount (鄭貞茂), Citigroup Taiwan’s chief economist, told an economic forum in Taipei.
Cheng said Taiwan was facing its most robust economic outlook since the Asian financial crisis of 1997.
He attributed the nation’s better-than-expected economic recovery to a strong growth in exports, forecasting that outbound shipments in the second quarter would see an increase of 5 percent from a year ago and 3 percent for the full year.
Data from the Ministry of Finance showed that exports in March rose to their highest level at US$23.37 billion since the global financial crisis began.
Exports in the first quarter rose 52.5 percent from a year ago to US$61.8 billion, the second-highest figure for that period in history.
Cheng forecast that the economy would grow 11.8 percent in the first quarter, 8 percent in the second quarter, 6 percent in the third quarter and 3 percent in the fourth quarter if exports continue to sustain their strong growth momentum.
As such, Citigroup GDP estimate for Taiwan for the full year would top 7 percent, which is higher than the government’s forecast of 4.72 percent, IMF’s projection of 6.5 percent and all local economic research institutes’ estimates.
“Growth in exports will also promote private investment, which is expected to increase 14.9 percent from a year ago this year,” Cheng said, adding that local consumption might see a strong rebound in the near future after being suppressed by high unemployment for months.
Amid growing concern that the credit crisis in Europe may affect Taiwan’s recovering economy, Chen said the impact was likely to be limited as Taiwan’s export growth momentum mainly comes from Asia.
Minister of Economic Affairs Shih Yen-shiang (施顏祥), another speaker at the forum, said that while economic growth for this year could be expected to be over 5 percent, it was essential to resolve high unemployment and the widening gap between the rich and poor in the country.
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