TAIPEI: The Taiwan Institute of Economic Research (TIER) raised its forecast for the nation’s GDP growth this year to 3.7 percent, from the 3.67 percent it predicted in January, due to expectations of stronger private investment and consumption balancing out lackluster exports.
However, the Taipei-based institute said it is neutral on the nation’s economic outlook.
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“We would not call the adjustment ‘an upgrade’ which would suggest a rosy outlook,” TIER economist Gordon Sun said, adding that falling crude prices call for minor adjustments to major economic bellwethers.
Savings on energy costs would allow companies and consumers more room for spending, increasing private investment by 5.95 percent and consumption by 2.99 percent year-on-year, up 0.28 and 0.05 percentage points respectively from the January forecasts, the institute said.
Exports are set to grow 5.28 percent this year from last year, while imports are set for 4.78 percent annual growth, the report said, an increase of 0.21 and 0.48 percentage points respectively from the previous projections, the institute said.
However, the institute trimmed the nation’s consumer price index to 0.08 percent this year, down 0.83 percentage points from the estimate three months earlier, due to cheaper oil prices.
The ultra-low inflation gauge would enable the central bank to keep policy rates unchanged for a while, Sun said.
The institute predicted the New Taiwan dollar would trade at an average of NT$31.48 against the US dollar this year.
It said an inflow of hot money would push up the local currency this year.
More than 30 nations worldwide have cut interest rates or printed money to stimulate economic growth this year.
The movement of these global funds are the reason for the rallies on the local bourse this week, Sun said.
