TIER trims 2012 local growth forecast


TAIPEI — The Taiwan Institute of Economic Research (TIER) has cut its forecast for Taiwan’s real gross domestic product growth in 2012 to under 4 percent on continuing global economic uncertainty and the country’s weak export outlook. The economic think tank on Tuesday projected Taiwan’s economy to grow 3.96 percent this year, 0.26 percentage points lower than the 4.22 percent it forecast in November last year, citing debt problems in Europe, the weak economic recovery in the United States, and slowing export growth in China. TIER President David Hong said the revision was also due to weakening demand for Taiwan’s exports of goods and services, which the institute now predicts will grow by 3.41 percent this year, down sharply from the 4.77 percent growth rate it forecast in November. Hong noted, however, that what mattered most at present was to “improve overall industrial competitiveness” rather than focusing on fast-changing economic figures.

The TIER found that 33.4 percent of manufacturing companies hold a gloomy view of Taiwan’s economic prospects for the next six months, while 24.5 percent are optimistic, according to the December results of a monthly survey it conducts on Taiwan’s overall business climate. The survey’s main manufacturing and service sector indicators also remained on a downward track, the Taipei-based research institute said. The manufacturing climate index fell for the fifth consecutive month in December, to 88.50, from 89.62 in November, while the service sector climate index posted a decline for the seventh consecutive month in December, to 87.73, from 89.18 in November.