Yuanta-Po­laris cuts Tai­wan’s 2015 GDP forecast

The China Post - - BUSINESS -

The Yuanta- Po­laris Re­search In­sti­tute, one of Tai­wan’s lead­ing think tanks, low­ered its forecast for the coun­try’s gross do­mes­tic prod­uct (GDP) growth for 2015 on Tues­day, cit­ing weak­en­ing do­mes­tic con­sump­tion and global de­mand.

Yuanta Po­laris low­ered its GDP growth forecast for Tai­wan to 3.32 per­cent from a pre­vi­ous es­ti­mate of 3.66 per­cent growth made in March, fol­low­ing sim­i­lar re­vi­sions by aca­demics and the gov­ern­ment.

In late May, the of­fi­cial Di­rec­tor- ate Gen­eral of Bud­get, Ac­count­ing and Sta­tis­tics down­graded its forecast for Tai­wan’s eco­nomic growth to 3.28 per­cent, down from a forecast of 3.78 per­cent growth made in Fe­bru­ary.

Yuanta-Po­laris Pres­i­dent Liang Kuo-yuan said the in­dex for Tai­wan’s lead­ing eco­nomic in­di­ca­tors re­leased by the Na­tional De­vel­op­ment Coun­cil fell in April for the 12th con­sec­u­tive month, in­di­cat­ing that the coun­try’s econ­omy has been los­ing mo­men­tum.

Ac­cord­ing to the NDC, the lo­cal eco­nomic in­di­ca­tor for April fell 0.58 per­cent from a month ear­lier to 97.74, while the coun­try’s eco­nomic com­pos­ite in­di­ca­tor flashed a blue light, sig­nal­ing eco­nomic con­trac­tion.

Liang said Tai­wan is ex­pected to main­tain GDP growth of above 3 per­cent this year de­spite a de­cline in ex­ports, how­ever, be­cause im­ports will also de­cline, keep­ing the coun­try’s trade sur­plus high.

But the de­clin­ing im­ports also re­flect weak­ness in do­mes­tic de­mand and un­healthy eco­nomic growth, the economist said.

Yuanta-Po­laris said it has low­ered Tai­wan’s ex­port growth forecast for 2015 to 3.59 per­cent from the pre­vi­ous es­ti­mate of 5.38 per­cent and cut its pro­jec­tion for im­port growth to only 0.61 per­cent, from 2.86 per­cent pre­vi­ously.

Tai­wan’s pri­vate in­vest­ment growth for 2015 is ex­pected to hit 2.73 per­cent, a down­ward re­vi­sion from an ear­lier es­ti­mate of a 3.91 per­cent in­crease, Yuanta-Po­laris said, as Tai­wan’s pri­vate sec­tor has grown less will­ing to in­vest be­cause of global eco­nomic un­cer­tainty.

The think tank said it also low­ered its forecast for Tai­wan’s pri­vate con­sump­tion growth for 2015 to 2.47 per­cent from the pre­vi­ous pre­dic­tion of 3.01 per­cent af­ter many do­mes­tic em­ploy­ers failed to raise salaries as much as they planned at the be­gin­ning of the year.

Yuanta-Po­laris said the lo­cal con­sumer price in­dex is ex­pected to grow 0.1 per­cent this year, while the av­er­age New Tai­wan dol­lar ex­change rate should be NT$31.50 against the U.S. dol­lar.

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