Taiwan’s economy is likely to remain healthy this year on solid exports led by consumer electronics shipments, while private consumption will improve further, economists said yesterday.
The Directorate-General of Accounting, Budget and Statistics (DGBAS), due to release preliminary fourth-quarter economic data and revise its GDP growth forecast for this year today, will probably make modest upward adjustments, the economists said.
Starting this year, the agency will unveil the latest economic data one month after the previous quarter ends, following the example of the US, Singapore and South Korea.
Cheng Cheng-mount (鄭貞茂), head economist at Citigroup Taiwan, said he expects GDP growth to remain unchanged at 4.3 percent this year from his previous estimate. The economy was estimated to grow by 10.4 percent last year, up from the 10 percent he predicted early last month, he said.
“The lack of revision [for this year] is positive given the higher base last year,” Cheng said by telephone.
Cheng forecasts the economy to have expanded 6.3 percent in the fourth quarter, compared with 6 percent estimated last month, driven by stronger exports, private investment and consumer spending.
For the whole of last year, Taiwan’s exports expanded 34.8 percent year-on-year to a record US$274.6 billion, the Ministry of Finance said last month, higher than the DGBAS’ 33.88 percent growth forecast to US$272.67 billion made in November.
Meanwhile, imports increased 44.2 percent year-on-year to US$251.4 billion last year, also beating the agency’s estimate of 42.24 percent at US$248.03 billion.
The figures indicated -stronger-than-expected trade activity between Taiwan and major trade partners, especially China, which accounted for 40 percent of outward shipments, Cheng said.
DGBAS last predicted the economy would grow 9.98 percent last year with the fourth-quarter GDP to pick up 4.7 percent from its level a year earlier.
Polaris Research Institute (寶華研究院) president Liang Kuo-yuan (梁國源) said there wasn’t much room for DGBAS to raise the forecast, given the high base of comparison and the ongoing efforts around the world to rein in fiscal debts.
“GDP growth is likely to hover around 4.5 percent this year,” -Liang said by telephone.
The Council for Economic Planning and Development had set the GDP growth target at 4.82 percent for this year.
Liang said global demand for consumer electronics proved stronger than expected last year and he attributed the trend to new-generation products and replacement demand previously delayed by the global financial crisis.
Looking forward, he said exchange rate volatility and austerity measures in the US, Europe and Japan would continue to introduce uncertainty to the economic landscape at home and abroad.
“If left unchecked, the appreciation in the New Taiwan dollar will further squeeze the profitability of major technology firms, as evidenced last quarter,” Liang said.
The economist expects the central bank to allow a bit more gain in the NT dollar in the first half of the year to help absorb imported inflationary pressure, but believed the central bank would prevent the NT dollar from rising above NT$28.5 against the US dollar.
“Exporters will suffer otherwise,” he said.
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