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Think tank upgrades ROC '14 growth forecast to 3.23%

TAIPEI -- The Taiwan Institute of Economic Research (TIER), a leading local think tank, raised its forecast Friday for Taiwan's gross domestic product (GDP) growth in 2014 on the back of a global economic recovery.

TIER upgraded Taiwan's GDP growth for 2014 to 3.23 percent, up 0.06 percentage points from an earlier estimate made in January.

The think tank said that despite the “polar vortex” that swept across much of the northern United States earlier this year, data from the world's largest economy largely indicated that it is on the recovery.

The economy in the eurozone has also been growing steadily based on improving manufacturing activity, the think tank said.

At the same time, China, the world's second largest economy, is suffering slower growth amid concerns over rising government debt and private sector credit woes, which TIER said could impact the global economic recovery to some extent.

That did not stop the think tank from upgrading Taiwan's economic growth forecast, predicting local consumption in 2014 could rise 2.51 percent from a year earlier, an upward revision from the previous

forecast of a 2.23-percent rise, a reflection of confidence in a recovery for Taiwan.

The think tank expects, however, that private investments will rise just 3.45 percent year-on-year, down 0.29 percentage points from an earlier estimate, while services and merchandise export growth was put at 4.14 percent, down 0.14 percentage points from a previous estimate.

TIER said that local and global economic fundamentals are pointing toward an improvement, meaning prices of energy and mass commodities in the world market could find some support.

As a result, the think tank said Taiwan's consumer price index is expected to grow 1.25 percent from a year earlier, which represents an upward revision of 0.14 percentage points from an earlier forecast.

It said local consumer prices will show controlled growth, and Taiwan's central bank is expected to maintain its loose monetary policy while guiding the Taiwan dollar to move steadily.

In mid-February, the Directorate General of Budget, Accounting and Statistics raised its forecast of Taiwan's 2014 GDP growth to 2.82 percent from an earlier estimate of 2.59 percent.

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