UBS raises GDP growth forecast to 4% for 2014

The China Post news staff and CNA

TAIPEI, Taiwan — UBS Securities has revised upward its forecast for Taiwan’s gross domestic product (GDP) growth in 2014 on solid economic growth outlook for the fourth quarter. The Swiss brokerage firm has fine-tuned its 2014 Taiwan GDP growth projection to 4.0 percent from an earlier estimate of 3.8 percent, driven by continued expansions in exports and industrial production. ��For 2015, we expect growth to remain decent but to slow from 2014, as the boosts from the positive product cycle taper; restocking demand eases; and external demand volatility may be higher,�� said Silvia Liu, a Hong Kong-based economist with UBS, who forecast a GDP growth of 3.3 percent for Taiwan in 2015. ��Accelerating U.S. growth and better terms of trade will be the key cushions,�� she wrote in a research note issued Thursday. In late November, the Directorate-General of Budget, Accounting and Statistics (DGBAS, ���F�|�D�p�`�B) said that Taiwan’s GDP grew 3.63 percent in the third quarter from a year earlier, in line with a government estimate of 3.62 percent growth made in August. The agency also raised the growth forecast for Taiwan’s 2014 gross domestic product was raised 0.02 of a percentage point to 3.43 percent due to robust demand for major exports The country’s per capita GDP is projected to reach US$22,518, with consumer price increases remaining in check at 1.18 percent as a result of weak global oil prices and mild weather. Commodity exports are set to grow 3.01 percent to US$314.6 billion for the year, as demand for the country’s semiconductor products continues to pick up steam, DGBAS said. Although the recent food oil scandal dented consumer confidence, a falling unemployment rate and rising wages have partially offset the negative impact and will drive up private consumption by 2.76 percent for the year, the agency added. Positive sentiment is also reflected in heightened private investment, which is expected to expand by 4.1 percent, as the aviation, telecommunications and semiconductor sectors keep on ramping up production capacity. Given the even rosier outlook for next year’s global economy, DGBAS expected Taiwan’s commodity exports should increase by another 3.56 percent in 2015, with private consumption and investment rising 2.74 percent and 5.59 percent, respectively. Inflation is expected to hold at 0.91 percent.

The DBGAS also revised Taiwan’s annual GDP growth between 2007 and 2013 to 3.42 percent, which is 0.14 of a percentage point higher than the 2011 figure. Estimates for the first three quarters of the year were adjusted upward to 3.41 percent, 3.87 percent and 3.63 percent, respectively. The fourth-quarter projection was modified to 2.83 percent, a quarter of a percentage point lower than previously anticipated.