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Think tank raises its forecast for nation's GDP growth in 2014

TAIPEI--The Chung-Hua Institution for Economic Research (CIER) has raised its forecast for Taiwan's GDP growth in 2014 because of signs that the global economy is improving.

The economic think tank said on Tuesday that Taiwan's economy would grow 3.05 percent this year, 0.02 percentage points higher than the 3.03 percent growth it forecast last December, citing an economic recovery in the United States and Europe.

Taiwan's official statistics bureau forecast in February that the country's economy will grow 2.82 percent in 2014.

Though the new forecast still only foresaw moderate growth, it would be an improvement over the sluggish performance of the past two years. Taiwan's economy grew 2.11 percent in 2013 and 1.48 percent in 2012.

Liu Meng-chun, director of the CIER Center for Economic Forecasting, said in a press briefing that the global economy is improving at a steadier pace than expected, which should benefit Taiwan's trade outlook.

The global economy will be driven by advanced economies in 2014 and 2015, while emerging markets may drag down the total growth, he said.

In addition to the improving global economy, trade pacts with Singapore and New Zealand could also have a positive impact on Taiwan's exports and help raise the island's GDP growth this year, Liu said.

Domestic consumption will likely be stagnant, however, as average real monthly earnings remain at levels seen 15 years ago, the economist cautioned.

CIER President Wu Chung-shu echoed Liu's overall assessment, saying that after the economic gloom of 2013, Taiwan's economy will finally “see the dawn it anticipates” this year and expand at a steady pace.

The National Development Council also expressed optimism, citing rising global economic forecasts by international research institutes and Taiwan's improving economic indicators.

According to the CIER's forecast, Taiwan's GDP growth will be 3.01 percent, 2.89 percent, 3.26 percent and 3.01 percent in the first, second, third and fourth quarters of the year, respectively.

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