The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for GDP growth this year to 5.72 percent, citing stronger-than-expected momentum on both exports and domestic demand amid a global economic recovery.
The Taipei-based think tank’s latest forecast was 0.01 percentage points higher than the 5.71 percent forecast made in January.
The TIER’s forecast was higher than the 4.29 percent growth forecast by the Chung-Hua Institution for Economic Research (中華經濟研究院) earlier this month and the 4.78 percent by the Polaris Research Institute (寶華綜合經濟研究院) last month.
Council for Economic Planning and Development Minister Christina Liu (劉憶如) yesterday said GDP growth would be about 4.5 percent this year, providing there were no unexpected disasters.
“Domestic demand grew by more than we expected in the first quarter of the year, making us the institute forecasting the most optimistic GDP growth for this year,” Chen Miao (陳淼), director of the institute’s macroeconomic forecasting center, told a media briefing.
The institute expected private consumption to grow 4.31 percent in the first quarter, with first quarter fixed-capital investments rising 6.04 percent from a year earlier. For the whole of this year, private consumption is expected to grow 3.65 percent, up from the 3.45 percent forecast TIER made in January, Chen said.
The institute also expected the nation’s fixed-capital investments to rise 0.12 percent for this year because of a higher basis of comparison for last year, while the latest figure was higher than the contraction of 1.02 percent predicted in January.
Exports are likely to expand 11.19 percent this year thanks to strong momentum in the first quarter, when exports rose 19.5 percent from a year earlier, TIER said, citing data from the Ministry of Finance’s.
On the inflation front, consumer prices are expected to rise 2.48 percent and wholesale prices to increase 4.61 percent this year, the report showed.
“The central bank has continued to raise the policy rate at the same pace, with either 12.5 basis points or 25 basis points at every board meeting this year, as it seeks to control and adjust inflationary pressure,” Chen said.
In a separate survey conducted by TIER, the local manufacturing sector expected business sentiment to improve slightly over the next six months, though the debt crisis in European countries and the US drove up near-term uncertainties, the institute said.
The business climate gauge for the manufacturing sector dropped to 99.37 points last month, up 0.61 points from a revised 98.76 points in February, TIER data showed.
However, the latest survey showed that the number of respondents who felt bullish about the prospects for business in the near term fell to 36.6 percent last month, from 47.7 percent in the previous month, data showed.
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