TAIPEI: The nation’s export-oriented economy could post faster growth of 2.06 percent next year, bolstered by a pickup in global demand for consumer electronics, especially in the second half of the year, the Taiwan Research Institute said yesterday.
The forecast suggests a two-fold increase on this year’s projected growth of only 0.98 percent due to a deteriorating international market, the New Taipei City-based think tank said.
Global trade could register better growth momentum next year compared with this year, which would be favorable to Taiwan given its heavy dependence on exports for growth.
The US, the world’s largest end-market for consumer electronics devices, is predicted to continue to improve and increase supply demand, Wu said.
The stable recovery in the US could prompt the US Federal Reserve to raise interest rates next week at the earliest, shoring up the US dollar against other currencies and deepening volatility across global financial markets, he said.
“I believe that a proper depreciation of the NT dollar can help support the economy,” Wu said, predicting that the local currency might trade at an average of NT$33.28 against the greenback next year.
The forecast would mean a 0.9 percent fall from yesterday’s close of NT$32.965 in Taipei trading, according to central bank’s tallies.
A weak NT dollar would help boost local exporters’ competitiveness and allow them to book foreign exchange gains, especially in the face of rising competition from China and dwindling margins.
The value of exports might grow 3.65 percent next year, while that of imports could pick up 3.35 percent, from parlous increases of 0.14 percent and 0.78 percent estimated for this year, Wu said.
The assumption has factored in crude oil prices that might remain low for a protracted period, he added.
Cheap crude oil prices are expected to weigh on consumer and wholesale prices, although both gauges could recover to positive territory with the base effect fading away, the institute said.
National Central University’s Research Center for Taiwan Economic Development director Dachrahn Wu said that private consumption could lend support to the economy next year, though overall sentiment weakened slightly in the past seven months.
In particular, the sub-indices on the job market outlook and durable goods purchases both remain above the 100-point neutral mark, boding well for private consumption, Wu said.
TRI expects private consumption to take a back seat in driving growth next year with a 1.7 percent increase, compared with a 2.38 percent pickup estimated for this year.
The government is expected to increase spending by 1.68 percent next year, reversing a downturn of 0.65 percent this year, the institute said.
