Taiwan GDP forecast to grow 2.34% in 2019: think tank

Taiwan's Yang Ming shipping company loads their containers on a ship leaving from the northern Taiwan harbor of Keelung on their first direct voyage to mainland China, Monday, Dec. 15, 2008. (AP Photo/Wally Santana)

TAIPEI (CNA) — The Taiwan Research Institute, one of Taiwan’s leading economic think tanks, said it has forecast that the gross domestic product of the country is expected to grow 2.34 percent in 2019.

The 2019 GDP growth forecast is shy of an anticipated 2.64 percent increase for 2018 amid unfavorable external factors such as slower global economic growth amid continued trade tension between the United States and China.

It was the first time the institute had given its forecast for Taiwan’s 2019 GDP growth.

As for 2018, the think tank raised its forecast by 0.02 percentage points from an earlier estimate made in June, citing a better-than-expected performance in the first half of the year.

The institute said the Washington-Beijing trade dispute started to affect the global economy in the second half of this year and is expected to continue to dominate the global economic growth pace next year.

In addition, volatility in international crude oil prices is expected to create more uncertainty in the global economy and send ripples through the world’s financial markets this year, the institute added.

As a result, the local economy is expected to face risk in 2019, the think tank said.

According to the institute, Taiwan’s merchandise and services exports for 2019 are expected to grow 2.77 percent in 2019, compared with an expected 3.36 percent increase in 2018, while imports are expected to grow 2.51 percent in 2019, moderating from 4.59 percent forecast for 2018.

Private consumption in Taiwan is expected to grow 2.20 percent in 2019, higher than an expected 2.16 percent increase in 2018, while the country’s private investment is expected to grow 3.75 percent in 2019, compared with a 3.12 percent increase forecast for 2018, the think tank said.

Speaking at a news conference, institute founder Liu Tai-ying (劉泰英) said China is encountering a growing fiscal crisis and if Beijing fails to well deal with its problems, a global financial crisis is possible.

Liu said that if a global financial crisis happens, the benchmark weighted index on the Taiwan Stock Exchange, or Taiex, could come under heavy pressure to test the 6,000-point mark.

On Dec. 18, the Taiex closed down 0.70 percent at 9,718.82 points.

By Pan Tzu-yu and Frances Huang