Polaris adjusts Taiwan '10 forecast to 4.57%

The figure was higher than the 4.1 percent forecast the think tank offered a few months ago. The revised number was also higher than the one given by Taiwan's official statistics bureau, the Directorate General of Budget, Accounting and Statistics (DGBAS).

DGBAS estimated next year Taiwan's economy will grow 4.39 percent, it said at the end of November.

Polaris announced its findings at a news conference yesterday, hosted by its president, Liang Kuo-yuan.

According to Liang, Taiwan will experience an economic contraction of 2.47 percent this year, better than the 3.76 percent it had given earlier and slightly better than the DGBAS's forecast of 2.53 percent.

The contraction will be less severe than anticipated due to an anticipated whopping growth of 7.15 percent for the fourth quarter, thanks to an increasingly noticeable economic recovery, Liang said.

As for next year, Taiwan's exports will enjoy higher growth due to a recovery in some of the island's top export destinations, such as the United States, the European Union and Japan. Plus, growth to be experienced by China and the Association of Southeast Asian Nations (ASEAN) countries will also boost Taiwan exporters' business, he said.

Exports account for a huge portion of Taiwan's gross domestic product, which is also made up of consumption, government spending and private investment.

Speaking of those, Liang said consumption is expected to grow steadily next year. Private companies, meanwhile, are also expected to make more investments, due to increasing demands in the international market. The government, meanwhile, has already announced a series of projects this year to boost the economy, including key measures to increase domestic demand and build infrastructure. Polaris forecasted by quarter, Taiwan's economy in 2010 will grow 8.03 percent, 6.16 percent, 3.89 percent and 0.95 percent, respectively.

As for the currency exchange rates, Liang said the new Taiwan dollar will average NT$32.3 against the greenback for the fourth quarter and NT$31.8 for next year.

He said the NT will experience a steady growth due to a weakened U.S. dollar, slowly rising exports and an expected influx of capital to Taiwan after the signing of the cross-strait Economic Cooperation Framework Agreement (ECFA).

The NT closed at NT$32.308 yesterday, a rise of 0.1 percent.

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