TAIPEI, Taiwan — The Yuanta-Polaris Research Institute has retained its forecast for Taiwan’s gross domestic product (GDP) growth for 2017 at more than 2 percent on the back of rising global demand.
In its latest prediction, Yunata-Polaris said it has left the GDP growth forecast of 2.10 percent unchanged from March’s estimate, making the think tank’s forecast the second-highest among local research institutions, only trailing the 2.11 percent of the Chung-Hua Institution for Economic Research (CIER).
While Yuanta-Polaris cut its forecasts for Taiwan’s investment, consumption, export and import growth for 2017, due to stronger- than-expected growth in the first quarter of this year, the think tank has decided not to adjust its GDP growth forecast for the entire year.
In the first quarter, Taiwan’s GDP grew 2.60 percent from a year earlier, up from the government’s earlier estimate of a 2.56 percent increase, according to a preliminary report released by the Directorate-General of Budget, Accounting and Statistics (DGBAS) in late May. The DGBAS has raised its forecast for GDP growth to 2.05 percent from 1.92 percent.
Yunata-Polaris said it has forecast that the economy will grow 2 percent, 1.88 percent and 1.96 percent, respectively, in the second, third and fourth quarters of the year.
The think tank said it has lowered its forecast for export and import growth for 2017 to 4.89 percent and 5.16 percent, respectively, down from 5.73 percent and 6.86 percent.
Due to the downgrading of the export growth forecast, Yuanta-Polaris said that private investment will be affected and private investment growth could reach 2.90 percent, falling from an earlier forecast of 6.65 percent, while capital formation is likely to hit 3.03 percent, a drop from the previous estimate of 5.70 percent.
Yunata-Polaris said that private consumption for 2017 is expected to grow 1.98 percent, compared with an earlier forecast of 2.03 percent.
Although the 2017 economic growth is expected to top a 1.50 percent increase in 2016, Yuanta-Polaris said that the country still lacks a comprehensive economic development plan to support its fundamentals for growth in the long term. The think tank said that uncertainty over cross-Taiwan Strait relations is expected to serve as one of the negative factors to economic growth after the pro-independence Democratic Progressive Party took office in May 2016.
Yuanta-Polaris said it has forecast that the consumer price index will grow 1 percent in 2017, compared with an earlier estimate of a 1.20 percent year-on-year increase, which shows that local inflation has remained stable.