Taipei, The Taiwan Institute of Economic Research (TIER) has left its forecast for Taiwan's 2019 gross domestic product (GDP) growth unchanged at 2.12 percent, saying an increase in domestic demand is expected to offset the impact of slowing global demand.
TIER, one of the leading think tanks in Taiwan, raised its forecast for Taiwan's 2019 fixed capital formation growth to 5.36 percent from its 4.60 percent projection in January.
The think tank also raised its forecast for Taiwan's private investment growth this year to 4.10 percent from an earlier estimate of 3.18 percent, and upgraded its forecast for private consumption growth to 2.30 percent from 2.20 percent.
Amid continued worry over a slowdown in the global economy, however, TIER lowered its 2019 forecast for Taiwan's exports of merchandise and services to 2.08 percent from an earlier prediction of 2.70 percent.
The think tank also lowered its growth forecast for Taiwan's imports of merchandise and services to 2.75 percent from an earlier estimate of 3.21 percent.
Gordon Sun director of TIER's Economic Forecasting Center, said there have been signs that manufacturers have been importing capital equipment in recent months to expand their production, which indicated optimism about global demand in the second half of the year.
In addition, Sun said, the government has been offering incentives for overseas-based Taiwanese companies to return and is expected to invest more in infrastructure ahead of the January 2020 presidential election.
According to TIER, Taiwan's imports of capital equipment rose 15.4 percent in the first quarter from a year earlier, while imports of semiconductor production equipment increased 41.2 percent.
As a result, Sun said, domestic demand is expected to pick up, which will help drive Taiwan's 2019 GDP growth.
TIER's forecast of Taiwan's 2019 GDP growth was close to that of the Directorate General of Budget, Accounting and Statistics (DGBAS), which was lowered in February from 2.41 percent to 2.27 percent due to weak global demand.
On April 30, the DGBAS will release Taiwan's GDP data for the first quarter of the year, which it has forecast at 1.82 percent.
Sun said the domestic economy will gain momentum in the third quarter, after a slow first half of the year. According to the TIER forecast, Taiwan will register economic growth of 1.80 percent in the first quarter, 1.85 percent in the second quarter, 2.30 percent in the third, and 2.51 percent in the fourth.
External factors are expected to impact Taiwan's economic growth for the rest of this year, Sun said, referring to the GDP growth in United States, China and Europe, which are three major buyers of Taiwan's goods.
Source: Focus Taiwan News Channel