Think-tank revises growth up to 4.61%

The economy is expected to pick up steam slightly this year, benefiting from steadily growing economies in the rest of the world, said Liang Kuo-yuan, president of the research think-tank, at a press briefing.

The rosy prospects have prompted the institute to revise its forecast for the country’s economic growth for 2007 upward to 4.61 percent from the 2006 level, slightly higher than the 4.58 percent forecast earlier by the Cabinet-level Directorate General of Budget, Accounting and Statistics (DGBAS), Liang said.

Polaris predicted that Taiwan’s economic growth will reach 4.59 percent for the third quarter and 4.62 percent for the fourth quarter, with the growth for the whole year registering 4.61 percent, Liang added.

Although the country’s exports to the United States and Japan have slowed, its exports to China, Europe and Southeast Asia have continued to expand, Liang said, adding that Taiwan’s export trade is expected to grow at a rate of 5.87 percent this year, with Q3 and Q4 growth topping 4.69 percent and 7.87 percent, respectively.

Meanwhile, Taiwan’s import trade is forecast to expand by a rate of 3.4 percent for the year, with Q3 and Q4 growth reaching 2.96 percent and 7.4 percent, respectively.

On the inflation rate, Polaris predicted that the consumer price index (CPI) will rise by 1.3 percent this year over the 2006 level, mainly as a result of several typhoons that drove up grocery prices, and rising prices of crude oil, commodities and other raw materials on the international market.

Meanwhile, Liang said, the Taipei-based Central Bank of China is forecast to continue to raise domestic interest rates in Q4 in an effort to get rid of the deficit suffered by the financial service sector in Q1 and Q2.

Lower interest rates, in turn, have attracted inflow of foreign funds, shoring up the value of the new Taiwan dollar, Liang said, adding that the currency is forecast to reach a rate of NT$32.5 to US$1 in Q4.

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