TAIPEI: Taiwan’s gross domestic product (GDP) will grow 1.6 per cent next year, up from an estimated 1.1 per cent growth in 2016, on the back of rising global demand, Standard Chartered Bank forecasted.
The bank revised its forecast upwards from a previous projection of 1.4 per cent growth in August because of the recovering global economy.
The bank also raised its forecast for Taiwan’s GDP growth forecast for 2016 from 0.7 per cent previously. But despite the slight improvement in growth next year, it will not be strong enough to get Taiwan’s central bank to tighten its monetary policy, Standard Chartered Bank economist said.
The economist expected the central bank to leave key interest rates unchanged at its upcoming quarterly policymaking meeting later this month and throughout 2017.
He said the bank raised its forecasts for the GDP growth in 2016 and 2017 because economic data released recently, such as for exports and industrial production, signalled a faster pace of growth in the future. Taiwan’s exports grew 12.1 per cent in November from a year earlier to US$25.34 billion, the highest year-on-year growth in 46 months, government data showed.
In October, Taiwan’s industrial production index moved higher for a third consecutive month, rising 3.7 per cent year-on-year to 109.6, and the Ministry of Economic Affairs expects another increase in November. He said improvements in outbound sales and industrial production could lead Taiwanese manufacturers to increase their investment and expand their workforces in 2017, leading to a mild rebound.
According to Standard Chartered Bank, inflation in Taiwan will rise to 1.6 per cent in 2017, up from an estimated 1.3 per cent in 2016.
Standard Chartered Bank said the central bank is expected to leave the discount rate unchanged at 1.375 per cent for all of 2017, according to a media report.
