Taipei, the Taiwan Institute of Economic Research (TIER), one of Taiwan's leading think tanks, said Wednesday that it has upgraded its forecast for Taiwan's gross domestic product (GDP) growth for 2018, as the global economy is on track to recovery.
TIER said it has raised its GDP growth forecast for 2018 to 2.45 percent by 0.11 percentage points from an earlier estimate made in January.
TIER joined the growing list of think tanks that have upgraded their GDP forecasts in line with the government.
The think tank appeared a little more upbeat than the Directorate General of Budget, Accounting and Statistics, which raised its forecast of Taiwan's GDP growth for 2018 by 0.13 percentage points to 2.42 percent in February.
According to TIER, Taiwan's export performance for the first quarter of this year was better than expected on the back of solid global demand for new tech applications as well as an increase in international crude oil prices.
As a result, TIER said it has raised its forecast for Taiwan's outbound sales growth to 3.83 percent, up 0.17 percentage points from an earlier forecast, while the think tank has also upgraded its forecast of the country's imports growth by 0.17 percentage points to 3.92 percent.
At a time when many Taiwanese firms have become more willing to invest to tap the growing global demand, TIER has also raised its forecast for Taiwan's capital formation growth by 0.49 percentage points to 3.76 percent and its forecast of the country's private investment by 0.50 percentage points to 2.80 percent.
Meanwhile, TIER has raised its forecast for Taiwan's private consumption by 0.04 percentage points to 2.16 percent, since a booming stock market has encouraged consumers to spend more, the think tank said.
TIER said Taiwan is faced with higher inflationary pressure as commodity prices in the international market have been on the rise, pushing up domestic product prices so that the country's consumer price index for 2018 is expected to rise 1.34 percent in 2018, an increase of 0.31 percentage points from an earlier estimate.
While the think tank upgraded its GDP growth forecast, Gordon Sun (???), director of TIER's Economic Forecasting Center, said he remained cautious, citing increasing uncertainty.
On top of that, Sun said, trade friction between the United States and China, the top two economies in the world, are likely to affect global demand, which in turn might drag down Taiwan's exports.
Also due to the trade disputes between Washington and Beijing, Sun said, Taiwanese investors operating in China are likely to become more willing to relocate their investments back to Taiwan, or even the U.S., to ease the impact.
Source: Focus Taiwan News Channel