Research institute raises local GDP forecast to 3.28%
By John Liu ,The China Post
July 26, 2014, 12:00 am TWN
TAIPEI, Taiwan -- Anticipating growing exports and local demand, the Taiwan Institute of Economic Research (TIER) yesterday raised Taiwan's 2014 GDP growth forecast to 3.28 percent, up 0.05 percentage points from its prediction made in April.
Thanks to a global economy seemingly on track for recovery, domestic consumption has gone up, as evidenced by increasing business revenues in the retail and food service sectors in the first half of 2014, the CIER said. As such, the institute predicted 2.8-percent growth in domestic consumption in 2014, up 0.29 percentage points from its previous forecast.
It appears that Taiwan's economy will be increasingly dependent on local demand, as the TIER made a downward adjustment on its forecast for Taiwan's exports. As both the International Monetary Fund and the Work Bank have recently lowered their global economic growth forecasts, along with China beefing up its local supply chain, the TIER believes Taiwan's exports will take a hit. The TIER expects exports to grow 2.94 percent this year, down 1.08 percentage points from its earlier prediction.
Imports, on the other hand, will grow 3.35 percent, up 0.05 percentage points from TIER's previous forecast, thanks to stronger-than-expected local demand.
Other Think Tanks' Forecast
According to the TIER's report, the economic index for the manufacturing industry was pegged at 102.28 in June, down 1.33 points from the previous month, while the index for the service industry was pegged at 102.4, up 1.23 points from May.
Several domestic think tanks have recently made upward adjustments on their GDP growth forecasts. Earlier this month, Academia Sinica (中研院) projected 3.31-percent growth, and Chung-Hua Institution for Economic Research (中經院) forecast 3.15-percent growth. Last month, Yuanta-Polaris Research Institute (元大寶華) raised its forecast to 3.18 percent. The figures are all close to the 3.2-percent goal set by the Cabinet's National Development Council.