DBS Bank (星展銀行) has maintained its GDP growth forecast for the nation at 1.9 percent for this year, as better-than-expected investment has offset declining exports, Singapore-based DBS economist Ma Tieying (馬鐵英) told a news conference in Taipei.
That compares with a growth estimate of 2.2 percent by Cathay Financial Holding Co (國泰金控), 2.1 percent by Standard Chartered Bank (渣打銀行), 2.01 percent by Academia Sinica and 2.06 percent by the Chung-Hua Institution for Economic Research (中華經濟研究院).
DBS has cut its GDP growth forecast for Singapore from 3 percent to 0.7 percent due to slumping exports and has lowered its forecast for Hong Kong from 2.5 percent to less than 2 percent due to political events, Ma said.
“Taiwan is likely to rank second among the four Asian Dragons, after only South Korea’s 2.1 percent growth,” Ma said.
Taiwanese exports showed a slight pickup of 0.5 percent last month from a year earlier after five consecutive months of declines, but the whole year’s exports are still expected to decline by less than 5 percent from last year, Ma said.
By comparison, domestic investment is forecast to grow 4.9 percent this year, the highest in six years, on the back of 93 returning businesses investing about NT$452 billion (US$14.54 billion), she said.
“Taiwan has seen capital goods imports continue to climb this year, which was strange at first glance considering that the nation’s exports were plummeting, but it makes sense as more Taiwanese firms prepare to move home,” Ma said.
Most of the returning firms belong to the information and communications technology sector, as they try to avoid extra tariffs amid a trade dispute between China and the US, she said.
Overall, a growing service industry, increasing arrivals of foreign tourists, rising exports to the US, solid private consumption and mild inflation have also helped the nation’s economy mitigate the effects of falling exports, she said.
The nation is forecast to post 1.7 percent GDP growth in the second quarter, flat from the previous quarter, and 1.9 percent and 2.2 percent growth respectively in the third and fourth quarters, she added.
The Directorate-General of Budget, Accounting and Statistics is scheduled to reveal second-quarter GDP growth and update its full-year GDP forecast next month after trimming its forecast from 2.27 percent to 2.19 percent in May.
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