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ADB predicts Taiwan economic growth of 3.7% in 2015

ADB predicts Taiwan economic growth of 3.7% in 2015

Manila, March 24 (CNA) Thanks to strong external demand for electronics and rising tourism services, Taiwan's gross domestic product (GDP) is expected to grow 3.7 percent in 2015 and 3.6 percent in 2016, the Asian Development Bank (ADB) forecast in an economic report released Tuesday. The predicted economic growth for Taiwan in 2015, the strongest rise in three years, is higher than the 2.8 percent predicted for Hong Kong and 3.5 percent for South Korea, according to the Asian Development Outlook (ADO) 2015 report, the ADB's flagship annual economic publication. The report said the outlook of Taiwan's exports and tourism, as well as repatriated earnings from overseas investments are positive. Taiwan recorded growth of 8.1 percent on its number of export orders in January, on top of a double-digit surge in September and October 2014, with orders from the United States and Europe surpassing those from China and Southeast Asian nations. "The outlook is positive for exports, tourism and remittances from overseas investments, which are expected to lift the current account surplus to 12.5 percent of GDP in 2015 and 13.0 percent in 2016," the report said. The ADB predicted robust consumption in Taiwan this year, thanks to rising consumer confidence, low unemployment, an expected hike of the minimum wage in the middle of the year, drops in fuel prices, and visits by Chinese tourists. The ADO report said that Taiwan's consumer confidence has been trending up since October 2014, unemployment is low, and real wages will rise because of the planned 3.8 percent increase in the minimum wage by mid-2015. "Consumption will receive further boosts from lower fuel and utility prices, as well as tourism expansion, mainly due to a likely increase in tourist arrivals from the People's Republic of China," the report said. In terms of investment, the ADB said the public sector investment outlook for 2015 and 2016 is "somewhat less positive, moderated mainly by the government's continuing efforts to consolidate its budget and uncertainty over energy-related investments." As for private investment, the bank forecast an expansion by the start of 2016 following an announcement from a leading contract chipmaker that it will ramp up production of next-generation chips. The ADO report also predicted that Taiwan will see an average 0.5 percent inflation this year and 1.0 percent in 2016 as oil prices gradually recover, employment prospects improve and incomes rise. However, the Manila-headquartered ADB also alerted Taiwan to future challenges and risks, including the upgrading of its core manufacturing sectors, changes on the political map, production localization of Chinese industries, Apple Inc.'s plan to relocate some of its production lines to South Korea, and the free trade pact between China and South Korea. Taiwan's GDP growth is expected to drop to 3.6 percent in 2016, with the gains from lower oil prices wearing off and export competition intensifying further, the report said. The 2015 ADO report forecasts that developing Asian countries will achieve GDP growth of 6.3 percent in both 2015 and 2016. The region also grew 6.3 percent in 2014. "Developing Asia is making a strong contribution to global economic growth," said ADB Chief Economist Shang-Jin Wei. The ADB, established in 1966, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. It has 67 members, 48 from the region itself. (By Emerson Lim and Elizabeth Hsu)


Updated : 2021-04-14 23:16 GMT+08:00