Academia Sinica yesterday raised its forecast for Taiwan’s GDP growth this year from 1.56 percent to 2.7 percent and expected the pace to accelerate to 4.24 percent next year, as the nation’s economy might continue to thrive on strong demand for high-tech products and green energy investments.
The upward revision from five months earlier made the Taipei-based think tank the most optimistic research body regarding the nation’s economic performance.
“Global economic recovery seems round the corner following the development and distribution of vaccines to curb the COVID-19 pandemic,” Academia Sinica research fellow Ray Chou (周雨田) told a media briefing in Taipei.
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That would allow global trade to regain growth momentum and lend support to Taiwan’s exports, Chou said, naming advanced semiconductor technology, information and communication technology, and green energy investments as the three main growth drivers next year.
Exports might grow 3.76 percent next year, from a projected 1.27 percent gain for this year, while imports might rebound 3.05 percent, from a 3.06 percent decline, the researcher said.
Demand for remote working and schooling devices would remain strong next year, as it would take some time for people around the world to be vaccinated, Chou said.
Private investment, another key growth driver, is expected to increase 4.01 percent next year, more than doubling this year’s pace of 1.53 percent, Academia Sinica said.
Local semiconductor companies would seek to upgrade and maintain their global technology leadership, it said.
Private investment would also gain support from urban renewal projects and efforts by foreign companies to build more offshore wind farms, it said.
Consumer spending might stage a rapid comeback next year with a 4.17 percent increase, from an estimated 2.49 percent contraction for this year, Chou said, adding that vehicle sales already show signs of recovery.
Rallies in local shares and vaccine progress would help boost consumer confidence, he said.
GDP growth could exceed 5 percent next year if global recovery proceeds smoothly, Chou said.
The pandemic, US-China trade tensions and other geopolitical risks pose uncertainty to the growth trajectory, he said, adding that chilling cross-strait ties could add pressure.
The nation’s GDP picked up 3.92 percent last quarter and might rise 3.91 percent this quarter, warranting an upward revision for the full year to 2.72 percent, Academia Sinica said.
However, Chou warned of bubbles forming in the local bourse and housing prices if left unchecked.
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