Academia Sinica, the nation's top research institute, yesterday revised upward its forecast for Taiwan's economic growth this year to 3.24 percent from the 3.08 percent it predicted in December.
The nation's GDP growth in the second quarter is expected to reach 3.13 percent following an 0.89 percent expansion between January and March, said Wu Chung-shu (吳中書), a researcher at Academia Sinica's Institute of Economics.
Third-quarter growth is estimated at 4.72 percent followed by 4.19 percent in the last quarter of the year, Wu said.
While domestic demand is not growing as strong as expected, Wu said the outlook for Taiwan is promising due to rising exports in recent months. "Exports have picked up more than expected to bolster future economic growth."
Following the growth of export orders by 11.45 percent and 14.27 percent in April and May respectively, the nation's exports are expected to post double-digit growth in the next three months, Wu said.
The researcher said China has taken over the US as Taiwan's biggest export destination, with the Chinese market accounting for almost 30 percent of Taiwan's export value, followed by the US with around 20 percent.
"China's markets have become pivotal to Taiwan's economy," Wu said.
Academia Sinica President Lee Yuan-tseh (
In response, Wu said the links will greatly cut down transportation costs to benefit Taiwan's economy in the long term -- from a strictly economic point of view.
The nation's private investments are expected to grow by merely 0.58 percent for the year while public investment is seen to contract by 0.88 percent during the same period, according to the institute.
Commenting on the NT dollar's recent appreciation against its US counterpart, Wu said his view went contrary to the market, which sees the NT dollar appreciating further against the greenback.
"The NT dollar's appreciation against the US dollar should be in tandem with the Singapore dollar," Wu said. He expects the local currency to trade at NT$32.91 against the greenback during the third quarter and NT$32.53 in the last quarter of the year.
As the NT dollar has limited room to appreciate against the US dollar, the nation's exports shouldn't be hardly hit by the exchange rate factor, Wu said.
Joan Zheng, a researcher at JP Morgan Chase Bank in Hong Kong also has a bullish view on Taiwan's economic growth, saying they forecast a 4.3 percent growth for Taiwan's GDP this year.
Both Academia Sinica's and JP Morgan's forecasts are much higher than those made by the government's Directorate General of Budget, Accounting and Statistics -- which forecasts GDP growth of 2.55 percent this year.
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