Taiwan to see 3.355 GDP growth this year: TRI
In the midst of weakened economic recovery around the world, the Taiwan Research Institute (TRI, ) yesterday made a 0.08-percentage point downward adjustment to the nation’s projected GDP growth this year to 3.35 percent.
Taiwan will see 3.32 percent, 3.25 percent, 3.06 percent and 3.73 percent growth in each of the four quarters this year, according to the TRI’s report.
TRI predicted last December that Taiwan would see 3.43-percent growth this year. As major economies implemented loosened monetary policies, the world is experiencing “a slow and imbalanced economic recovery,” said TRI President Wu Tsai-yi ( ) at an economics forum held yesterday.
On the domestic side, exports have stagnated, while local investment has turned conservative. More specifically, the semiconductor and airline industries have cut down capital expenses, while the real estate industry grew less optimistic after the government rolled out measures to suppress the housing market.
Taiwan’s relatively high saving rate is another factor that prohibits investment activities that may otherwise fuel economic growth, said the TRI, which tuned down private investment growth to 3.9 percent.
In addition, government investment and state-owned business investment are estimated to drop 4.48 percent and 12.59 percent, respectively.
On the positive side, the research institute tuned up its forecast on private consumption growth, from 2.77 percent to 2.84 percent. Lower costs of crude oil and raw material imports have resulted in lower consumer prices and consequently higher purchasing power for the public.
With improvement in the job market, namely lower unemployment rates and steady growth in regular earnings, the public has exhibited more confidence in household economy, according to the TRI.
Taiwan’s Falling Exports
The TRI also pointed to some uncertainties that may impact the economy in the latter half of 2015: whether the U.S. economy will gain enough strength to enable the Fed to raise the rate and depreciation of various currencies as a result of quantitative easing launched by other economies.
On the domestic side, the real cause behind Taiwan’s falling exports is still being studied; the Middle East respiratory syndrome that is ravaging South Korea may also affect the travel industry in Taiwan.
Exports of electronics products, machinery and transportation equipment have shown slight growth, while those of mineral products, chemical products, base metals, rubber and plastic products all saw decline. TRI founder Liu Tai-ying ( ) pointed out that exports have fallen for most countries in Asia, and in Taiwan’s case, the larger drop of imports is a sign that that businesses are not getting many orders. It is a worrisome development, Liu said.