TAIPEI–Switzerland-based banking group UBS has raised its forecast of Taiwan’s gross domestic product growth for 2013 to 4.2 percent from an earlier estimate of 3.7 percent on the back of a rebound in exports as global demand has revived.
In a recent research report, UBS said Taiwan’s economy has shown signs of a rebound in the fourth quarter of last year, when the country posted higher-than-expected GDP growth of 3.72 percent.
With global demand on the rise, Taiwan’s economic momentum is expected to continue this year and the country is expected to perform better in 2013 than 2012.
Last month, Taiwan’s government reported the country’s 2012 GDP grew 1.26 percent from 2011, a slight upward revision from a preliminary reading of 1.25 percent due to the better-than-expected performance in the fourth quarter.
The government also raised its forecast of Taiwan’s economic growth for 2013 to 3.59 percent from a previous estimate of 3.53 percent, citing an increase in exports and private consumption as a reason.
According to the official predictions, Taiwan’s merchandise exports for 2013 are expected to grow 6.23 percent from 2012, while private consumption is expected to rise 1.86 percent from a year earlier.
UBS has even predicted Taiwan’s private consumption will grow more than 2 percent in 2013.
The banking group said that local industrial production is expected to expand by 5 percent to 6 percent, while inflation could ease to 1.5 percent in 2013 from about 1.9 percent recorded a year earlier.
UBS said as the local economy is expanding, the Central Bank of the Republic of China (Taiwan) is likely to shift from a neutral to a moderately tighter stance in its monetary policy this year.
The bank said the central bank is expected to raise its key interest rates in the first quarter of this year at the earliest.
The fourth quarter of last year was the sixth consecutive quarter in which the central bank had left key interest rates unchanged as a way to lift the economy.