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Research group cuts '14 growth forecast to 2.72%

TAIPEI --- Yuanta-Polaris Research Institute lowered its forecast Wednesday for the nation's economic growth next year to2.72 percent, from the 3.45 percent it predicted in September.

Citing an improved global economic outlook for 2014 and a low comparison base effect, which are expected to contribute to the moderate growth, the private Taipei-based think tank has also adjusted downward its growth forecast for this year to 1.77 percent from the2.38 percent it forecast in September.

Yuanta-Polaris President Liang Kuo-yuan told a press conference that some international institutes have predicted that Taiwan's economy in 2014 will be better than this year and that the contributions of the developed countries to global economic growth this year are expected to exceed those of developing nations.

Taiwan's exports and domestic demand are expected to benefit from the improving global economy in 2014, according to Liang.

Liang also said that since 2012, the global trade growth rate was almost the same as the global economic growth rate. But the situation has changed, Liang went on, adding that if a country's trade growthfails to catch up with its economic growth, it could harm export-reliant countries. “Taiwan must be cautious about this,” he added.

In addition, Liang noted that relations between Taiwan and China have shifted from complementary to competitive. And increasing competition from South Korea has also put Taiwan's exports at a disadvantage.

Next year, the country should pay particular attention to structural problems in the economy, including the real wage decline and slackening investment, as it faces the challenges from sluggish domestic and foreign demand.

The institute also gave its growth forecasts for 2014 for private consumption and private investment at 1.55 percent and 3.75 percent, respectively, as well as predicting that exports and imports next year will increase 3.93 percent and 3.69 percent, respectively, while the consumer product index will surge 1.15 percent.

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