GDP could increase by 2.5 percent next year, slower than an estimated 2.8 percent pickup this year, as it might benefit from export growth amid the US-China trade dispute, Standard Chartered Bank said on Monday.
The bank is more optimistic than the Directorate-General of Budget, Accounting and Statistics, which expects GDP growth to reach 2.66 percent this year and moderate to 2.41 percent next year.
“Taiwan is not necessarily a victim in the trade war,” Standard Chartered Bank Taiwan (渣打銀行) Northeast Asia senior economist Tony Phoo (符銘財) told a media briefing in Taipei.
The dispute is likely to contribute to GDP growth by 0.25 percentage points next year, as order transfers would offset a drop in exports to China, Phoo said.
However, the central bank is expected to keep its interest rates unchanged, he said.
In addition, the central bank would stay vigilant about the global economic situation and volatility in emerging markets, he said.
Monetary policy in Europe and Japan would remain accommodative, he added.
Global GDP growth would ease to 3.6 percent next year from 3.9 percent this year, bank global chief economist David Mann said.
US tariffs would affect China’s GDP growth by 0.6 percentage points next year, Mann said.
Bejing’s supportive fiscal policy would help its economy weather the dispute with 6.4 percent GDP growth, following estimated 6.6 percent growth this year, he said.
“Neither the US nor China is the winner in the trade war,” Mann said, adding that while US demand accounts for 3 percent of China’s GDP, China also contributes about 1 percent to the US’ GDP.
South Korea and Japan would not be affected, while Vietnam, Mexico, Malaysia, Thailand and Canada might benefit from order transfers, he said.
The US Federal Reserve is expected to raise interest rates four times next year, at 25 basis points each quarter, given the economy’s stronger performance, Mann said.
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