The Yuanta-Polaris Research Institute (?????????), one of Taiwan's leading economic think tanks, has raised its forecast of the country's gross domestic product (GDP) to more than 1 percent for 2016.
Citing a quick rebound in exports and private investments which has sped up the pace of local economic growth, Yuanta Polaris said that Taiwan's GDP could rise 1.10 percent compared with 2015, up from an earlier estimate of 0.90 percent made in June.
Yuanta Polaris's updated forecast came closer to the government's prediction in August which suggested that Taiwan's economy would grow 1.22 percent this year.
The think tank's forecast appeared more upbeat than that of its counterparts, such as the Chung-Hua Institution for Economic Research (CIER, ???) and the Taiwan Institute of Economic Research (TIER, ???), which anticipated the 2016 GDP growth will hit 0.84 percent and 0.77 percent, respectively. But TIER and CIER are expected to revise their forecasts later this year.
The move made by Yuanta-Polaris to raise its GDP growth forecast came after Taiwan's outbound sales have shown signs of rebounding. Taiwan's exports for August rose for the second consecutive month after ending the longest sustained export slump in the country's history -- 17 consecutive months -- in July.
As a result, Yuanta Polaris has upgraded its forecast of merchandise and services exports growth for 2016 to 1.31 percent from an earlier estimate of minus 0.20 percent, and hiked the prediction of the country's goods and services imports growth to 2.28 percent from 0.56 percent.
An improving export performance has led manufacturers to expand their investments. The think tank has also raised its forecast of Taiwan's private investment growth for 2016 to 1.92 percent from an earlier estimate of a 1.54 percent increase, while it has also hiked its forecast of the country's private consumption growth to 1.77 percent from the previous forecast of a 1.64 percent rise.
Yuanta's more optimistic forecast reflected sentiments shared by Taiwan's central bank, which announced it will stop its interest rate cut cycle in its quarterly policymaking meeting on Thursday, citing the rebound in exports which account for 60 percent of the country's GDP.
The central bank had last cut interest rates in a quarterly meeting held at the end of June, marking the fourth consecutive quarter in which the bank had lowered rates in a bid to boost the fragile local economy.
Despite an upgrade of its forecast of Taiwan's 2016 GDP growth, Yuanta-Polaris President Liang Kuo-yuan (???) said that the local economy remains vulnerable because the global economy's pace of recovery appears slow.
Liang said that if the government fails to come up with effective measures to help the economy steam ahead, the local economic prospects could dim and the current rebound could just be a short-lived phenomenon.
As for 2017, Yuanta-Polaris said that Taiwan's economy is expected to grow by 1.80 percent.
Source: Focus Taiwan News Channel