Taiwan's real gross domestic product growth estimate for 2017 was revised upward to 2.18 percent from 1.68 percent by Taipei City-headquartered Academia Sinica July 19, reflecting greater confidence in the economy and improving fiscal conditions at home and abroad.
Real exports and imports of goods and services for the year are expected to increase 4.23 percent and 4.04 percent, respectively, resulting in a trade surplus gain of 7.62 percent. At the same time, private investment is set to rise 2.36 percent.
After factoring in declining food prices since February, as well as a higher comparison base from last year, inflation will remain stable at 0.93 percent, or 0.2 of a percentage point lower than the previous forecast.
Unemployment is set to hover around 3.82 percent and, with no significant improvement in Taiwan's salary levels on the horizon, private consumption is pegged at 1.8 percent.
According to the premier academic institution in the Republic of China (Taiwan), the rosy forecast is largely due to the steady global recovery over the first half of the year characterized by strengthening demand and a more stable price environment.
This encouraging development has benefitted advanced economies and emerging markets, Academia Sinica said, adding that the International Monetary Fund recently lifted its growth forecasts for global GDP and trade volume to 3.5 percent and 3.8 percent, respectively.
Against this positive backdrop, Taiwan reported GDP growth of 2.6 percent for the first quarter of the year on the back of expanded capital spending and robust export numbers.
But Academia Sinica cautioned that a number of issues threaten to slow Taiwan's economic momentum going forward. These include weak private consumption and fallout from ongoing labor and pension reforms, as well as uncertainties stemming from geoeconomics, geopolitics and a rash of protectionism.
Academia Sinica's GDP forecast for 2017 is the most optimistic presented to date by a Taiwan-based research organization. The Directorate-General of Budget, Accounting and Statistics predicts 2.05 percent; Chung-Hua Institution for Economic Research, 2.14 percent; Taiwan Institute of Economic Research, 2.04 percent; and Taiwan Research Institute, 2.01 percent.
Source: Taiwan Today