TAIPEI (CNA) – The Chung-Hua Institution for Economic Research (CIER), a local economic think tank, said Thursday that it has raised its forecast for the country’s gross domestic product (GDP) growth for 2017 on the back of better-than-expected export performance.
CIER has upgraded its forecast for Taiwan’s GDP growth for 2017 to 2.18 percent from a 2.14 percent prediction it made in July, joining its counterparts and even the government in giving a more upbeat picture about the local economic fundamentals.
The think tank has also anticipated that the local economy will grow further in 2018 at 2.20 percent, beating an earlier forecast of 2.15 percent, also made in July.
CIER President Wu Chung-shu (吳中書) told the press that with global demand on the rise on the back of a worldwide recovery, Taiwan enjoyed higher exports, particularly in the third quarter of this year.
Wu said the strong showing in commodity and services exports during the July-September period boosted the 2017 GDP by 0.85 percentage points, up from an earlier estimate of 0.47 percentage points.
He said the stronger-than-expected outbound sales are expected to offset the impact of lower-than-expected domestic demand for 2017.
According to CIER, Taiwan’s exports in merchandise and services for 2017 are expected to grow 3.54 percent from a year earlier, an upgrade from an earlier forecast of 2.97 percent, while imports for the year are expected to rise 3.29 percent, an upward revision from 2.81 percent.
CIER said the country’s private consumption for 2017 is expected to grow 1.73 percent, a downgrade from an earlier estimate of 1.87 percent, while capital formation and private investments are expected to rise 3.28 percent and 2.31 percent, respectively, compared with the previous forecast of 2.73 percent and 2.95 percent.
The think tank said Taiwan is expected to report a 2.07 percent increase in GDP for the third quarter, while the fourth-quarter growth will moderate to some extent to 1.90 percent on the back of a relatively high comparison base over the same period of last year.
Wu said that while the global economy has been on the road to recovery, which is expected to benefit Taiwan’s economy, the world’s economy remains haunted by some economic and non-economic uncertainty.
Wu said that how the U.S. Federal Reserve will carry out its rate hike cycle will continue to be part of the uncertainty to the global and local economy, while geopolitical unease over the Korean peninsula and the Middle East could continue to affect the pace of the economic recovery worldwide.
By Chiu Po-sheng and Frances Huang