Taipei-The Yuanta-Polaris Research Institute, one of Taiwan's leading economic think tanks, said Wednesday it has raised its forecast for Taiwan's gross domestic product (GDP) for 2019 on the back of an increase in private investment at a time when more Taiwanese companies have pledged to invest at home to avoid trade tensions between the United States and China.
According to Yunata-Polaris, Taiwan's GDP is forecast to grow 2.3 percent in 2019, up from an estimated 2.1 percent increase in March.
The think tank forecast that the local economy will grow 2.20 percent in 2020, the first time it has made a forecast for next year.
Yuanta-Polaris President Liang Kuo-yuan (???) told reporters that investments pledged by Taiwanese firms appear higher than the think tank expected in March, and those investments are expected to drive Taiwan's GDP growth in 2019.
According to the Ministry of Economic Affairs (MOEA), as of last week a total of 140 Taiwanese companies operating overseas, in particular China, have pledged to invest NT$592.6 billion (US$19.12 billion) at home under an incentive program launched by the ministry in January to encourage Taiwanese investors to return. The investments could create 52,277 jobs in the local market, the MOEA estimated.
The investment figure has exceeded the goal of NT$500 billion set by President Tsai Ing-wen (???) for 2019.
Liang said the large amount of investment planned by Taiwanese investors will not only boost private investments, it will also help rebuild the global supply chain.
Yuanta-Polaris forecasts that Taiwan's private investment will grow 5.05 percent in 2019, up from an earlier estimate of 3.67 percent.
On the back of solid demand for semiconductors, Taiwan's export momentum is expected to pick up, so Yuanta-Polaris upgraded its forecast of the country's outbound sales growth for 2019 from 2.22 percent to 3.43 percent.
In addition, the think tank also raised its forecast for Taiwan's import growth for 2019 from 2.21 percent to 2.92 percent.
However, after taking into account the reduced willingness of local employers to raise wages for employees and weakening consumer confidence, Yuanta-Polaris lowered its forecast of private consumption growth for 2019 from 2.19 percent to 2.02 percent.
Liang said he remains cautious about Taiwan's exports since China is one of the largest buyers of Taiwanese goods at a time when the Chinese economy faces downside risks that could send demand lower.
Amid continued trade disputes between the United States and China, concerns over an economic slowdown and even a global recession run deep, Liang said.
Yuanta-Polaris said it expects Taiwan's GDP to grow 2.32 percent in the third quarter and rise 2.62 percent in the fourth quarter.
As for 2020, the think tank said Taiwan's private investments and consumption are forecast to grow 3.08 percent and 2.00 percent, respectively, while the country's exports and imports are expected to grow 3.13 percent and 3.33 percent.
Yuanta-Polaris forecasts that consumer prices in Taiwan will grow 0.66 percent in 2019 and 0.83 percent in 2020.
Source: Focus Taiwan News Channel