The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday said that it had raised its forecast for Taiwan’s GDP growth this year to 3.42 percent, citing positive factors including increasing investments, solid private consumption and stronger exports.
TIER, one of the leading economic think tanks in Taiwan, upgraded its forecast by 0.27 percentage points from its previous estimate of 3.15 percent in November last year.
Taiwan’s GDP is estimated to grow 2.01 percent in the first quarter, 2.95 percent in the second, 3.95 percent in the third and 4.65 percent in the fourth, TIER said.
Photo: Hsu Tzu-ling, Taipei Times
TIER Economic Forecasting Center director Gordon Sun (孫明德) said investment, private consumption and export performance would be three pillars of Taiwan’s economic growth for this year.
“The three factors are just like three hits in a baseball game to support Taiwan’s economy,” Sun said, adding that in previous years, Taiwan had “hit a home run economically” without all three.
Exports in goods and services this year would grow 6.05 percent from a year earlier on the back of a continued boom in artificial intelligence (AI) applications, TIER said.
That compared with an estimate in November last year of a 4.68 percent increase.
However, the strength of exports growth would continue to be uneven, with old economy industries haunted by a production glut in China and escalating price competition, TIER said.
Imports growth this year is expected to be 6.27 percent from a year earlier compared with the previous estimate of 5.27 percent, it said.
Due to strong demand for AI, Taiwanese chip suppliers would remain keen to expand production, so private investments are expected to grow 5.66 percent this year, up 0.86 percentage points from the previous estimate, it said.
Fixed capital formation is expected to grow 5.95 percent, compared with the previous estimate of 4.93 percent, it added.
Although private consumption is expected to be resilient, growth is expected to be 2.11 percent this year — due to a high comparison base over the past year — a slight cut from the previous estimate of 2.26 percent, TIER said.
The institute raised its forecast for consumer price index growth to 1.95 percent for this year, up 0.08 percentage points from the previous estimate, saying that the nation would still face inflationary pressure.
TIER president Chang Chien-yi (張建一) said the move by the Legislative Yuan to cut about NT$100 billion (US$3.06 billion) in aid for state-owned Taiwan Power Co (台電), which has sustained huge losses in the past few years, could lead the company to increase electricity rates.
That could become one of the factors pushing up inflation, Chang added.
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