TAIPEI–Barclays PLC has expressed optimism about Taiwan’s economic growth in 2014, saying the export-oriented economy will benefit from an increase in investments in production equipment and material in the bellwether electronics sector.
In a recent research report, the British bank said Taiwan’s current account surplus for December slowed from November as local manufacturers raised their investments in production equipment imports, with capital goods imports up 24.7 percent year-on-year, while the local manufacturing activity continued to expand in the month.
The bank said the increase in capital goods and expansion in production activity showed the local manufacturing sector holds a positive attitude toward global demand in 2014.
In December, Taiwan’s imports grew 10.1 percent from a year earlier, compared with a 1.9 percent year-on-year decline in exports in the month, due to an increase in capital goods purchases.
According to the Chung-Hua Institution for Economic Research (CIER), one of Taiwan’s leading think tanks, the country’s purchasing mangers’ index (PMI) rose to 53.6, up from November’s 52.
Echoing Barclays, Gartner Inc., a U.S.-based information technology market advisory firm, has forecast that worldwide investments in high-tech production equipment for 2014 are expected to grow 3.1 percent from a year earlier.
Gartner said high-tech products suppliers, such as Taiwan, South Korea and China, will become the beneficiaries under such favorable circumstances.
Barclays said Taiwan’s efforts to increase the number of foreign tourists visiting the country and expand the market for Chinese-yuan denominated transactions are expected to boost local demand and accelerate the development of the local financial market in 2014.
The British bank said although Taiwan’s central bank has not resorted to currency depreciation competition to lift the country’s global competitiveness, Perng Fai-nan, governor of the central bank, encouraged enterprises in both the public and private sectors to take advantage of the current low interest rates to raise funds for expansion. To keep liquidity ample, Barclays said, the central bank is expected to leave the discount rate unchanged at 1.875 percent through the second quarter of this year, to give another boost to the economy.
In late November, the government forecasted that Taiwan’s economy will grow 2.31 percent in 2014, up from an estimate of a 1.74 percent increase for 2013.