Yuanta-Polaris cuts Taiwan’s 2015 GDP forecast
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.