Public and private research institutes plan to raise their forecasts for the nation’s economic growth last year and this year after major economic bellwethers turned out stronger and continue to outperform, Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) president Chang Chien-yi (張建一) said yesterday.
Chang shared his views on the nation’s economic outlook in a speech to the Third Wednesday Club (三三會), a local trade group that limits membership to the top 100 firms of each business sector.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) is to release this month an advance report on the economy in the fourth quarter of last year, and next month an update of its economic projections for this year.
Photo: CNA
The DGBAS might revise up its GDP growth forecast for last year from 2.54 percent to between 2.7 and 2.8 percent, given stronger exports and other key economic indicators, Chang said.
Exports expanded 11.7 percent in the fourth quarter, beating the government’s forecast by 3.9 percentage points, thanks to robust demand for 5G wireless devices and electronics used in the work-at-home and distance-learning trends, the Ministry of Finance said earlier this month.
TIER would need to revise upward its own growth predictions, which are to be released on Monday next week, Chang said.
In November last year, the Taipei-based institute projected growth of 4.1 percent for this year.
“Taiwan appears to have emerged from an anemic economic state seen in past years, with GDP growth of 1 to 2 percent,” Chang said, adding that the economy is expected to expand by 4 to 6 percent from this year, bolstered by overseas and domestic demand.
Investment by the public and private sectors is underpinning the difference, the economist said.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, whose clients include Apple Inc, Qualcomm Inc, Nvidia Corp, Advanced Micro Devices Inc and other global technology giants, is looking at capital spending of US$25 billion to US$28 billion this year.
The record spending would spur local firms in TSMC’s supply chain to follow suit and lend further support to private investment, Chang said.
Local companies are generally upbeat about their business outlook, based on TIER’s sentiment surveys, the economist said, as Taiwan benefits from being a reliable and trustworthy partner amid the COVID-19 pandemic and US-China trade tensions.
Rock Hsu (許勝雄), chairman of the Third Wednesday Club and contract laptop maker Compal Electronics Inc (仁寶電腦), said that order visibility at his company extends into the second quarter.
Spiking COVID-19 cases in many parts of the world would have a limited effect on Taiwan’s economy, Hsu said.
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