The nation’s economic growth is expected to remain tepid until 2018 amid prolonged weakness in the world’s major economies, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
“The outlook would remain conservative for quite some time with little chance to see a significant improvement, as growth remain listless in the US, Japan, Europe and China,” TIER Economic Forecasting Center director Gordon Sun (孫明德) told reporters on the sidelines of a forum marking TIER’s 40th anniversary.
The think tank forecasts the nation’s GDP to grow about 0.77 percent annually this year and it expects the growth rate to be little changed over the next two years at about 1 percent annually.
Although exports grew in July and last month from the year-earlier results, the gains do not mark the beginnings of an across-the-board recovery, Sun said.
The gains were primarily driven by rising smartphone shipments and capital expenditure from the semiconductor sector, but a single sector cannot sustain the momentum required for an economy-wide recovery, Sun said.
Sun said that Apple’s latest iPhone models might bring better-than-expected sales amid battery mishaps affecting Samsung Electronics Co’s Galaxy Note 7 phones, which should help Taiwanese suppliers of the US firm, Sun said, adding that the situation could boost Taiwan’s exports performance for the remainder of the year.
Experts at the forum discussed government plans to bring innovation to seven industrial sectors.
Government resources should not be allocated to the biotechnology sector, former National Development Council minister Lin Chu-chia (林祖嘉) said.
Despite its immense market potential, the sector creates only a limited amount of jobs, Lin said.
Lin said the government’s focus on transitioning toward a “circular” economy was worth supporting, as it is especially vital for the petrochemical sector.
Petrochemicals is one of the most important industries for Taiwan’s economy, with annual production totaling about NT$4 trillion (US$126.1 billion), according to statistics from the Industrial Economics and Knowledge Center.
Local petrochemical companies should reduce waste and minimize environmental impact, Lin said.
TIER president Lin Chieng-fu (林建甫) said that the decision to raise the minimum wage by 5 percent next year might compel companies to migrate abroad as labor costs increase, but added that the hike is needed in light of a 16-year stagnation in real-wage growth.
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