TAIPEI:The nation’s exports have yet to recover, despite domestic demand holding firm, the Taiwan Institute of Economic Research (TIER) said yesterday.
The decline in exports is likely to deteriorate in the current month due to a relatively high comparison base, after easing to single-digit percentage points last month, TIER economic forecasting center director Gordon Sun said.
The government’s Directorate-General of Budget, Accounting and Statistics (DGBAS) tomorrow is scheduled to cut its forecast for GDP growth this year, Sun said.
TIER last month trimmed its forecast for GDP growth this year to 1.27 percent and expects the DGBAS to reach a similar conclusion based on disappointing exports thus far.
“The economy continues to struggle to come out of a long, winding course of weakness,” Sun told a media briefing in Taipei. “It is premature to speculate on a recovery with uncertainty and downside risks clouding visibility.”
The DGBAS in February lowered its growth projection for this year to 1.47 percent, still higher than most forecasts by other domestic and foreign research institutes.
Companies from different sectors shared TIER’s cautious sentiment, with the business confidence gauge of manufacturers standing at 97.07 last month, little changed from a revised 96.66 in March.
Only 34.6 percent of companies in the industry are upbeat about their business prospect in the coming six months, down 0.4 of a percentage point from the previous month, the institute’s monthly report said.
The number of companies with pessimistic views gained 2.9 percentage points to 15.9 percent last month, the report said.
Firms involved in making oil and coal products are the most confident about their business outlook, thanks to an increase in crude prices even though they remain low compared with a year earlier, the report said.
The confidence reading for service sectors printed 87.27 last month, losing 1.24 points from a revised 88.51 in March, the report showed.
TIER president Jeff Lin said that fragile cross-strait ties might weigh on inbound tourists, especially from China, where authorities have suspended business visits by Chinese government officials to put pressure on President Tsai Ing-wen to toe the “one China” line.
Talks of business and inheritance tax hikes are weakening private investment interests, Lin said.
Overall taxation costs reached 34.5 percent for doing business in Taiwan, although corporate income taxes stand at a relatively low 17 percent, Lin said.
The business confidence gauge printed 81.22 for builders and developers, up for the second consecutive month as companies displayed more optimism after the central bank eased mortgage restrictions in late March.
