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Think tank cuts Taiwan's 2015 GDP forecast

Think tank cuts Taiwan's 2015 GDP forecast

Taipei, July 24 (CNA) The Taiwan Institute of Economic Research (TIER) said Friday that it has lowered its forecast of Taiwan's 2015 gross domestic product growth to 3.11 percent at a time when the weakness of the global economy has sent demand lower.
TIER said that the updated GDP growth is 0.59 percentage points lower than an earlier estimate of 3.70 percent that the think tank made in April.
TIER said that weakening global demand has prompted the think tank to turn cautious about Taiwan's export performance.
In June, Taiwan's exports fell 13.9 percent from a year earlier, marking the fifth consecutive month in which the country registered a year-on-year drop in exports. In the first six months of this year, exports dropped 7.1 percent from a year earlier.
As a result, TIER has cut its forecast for Taiwan's 2015 export growth by 1.29 percentage points to 3.99 percent, while the estimate for imports has been cut by 2.11 percentage points to 2.67 percent.
With investors growing reluctant to spend due to slower global demand, TIER has cut its forecast for Taiwan's private investment growth for this year by 2.45 percentage points to 3.50 percent, while the think tank has also lowered its capital formation growth forecast by 1.91 percentage points to 1.58 percent.
Private spending is also expected to drop accordingly, so the think tank has cut its forecast for private consumption by 0.44 percentage points to 2.55 percent.
Gordon Sun, director of TIER's Macroeconomic Forecasting Center, said that the sharp fall in Taiwan's exports in the first half of this year largely resulted from a weakening pricing power of raw material suppliers after a plunge in international crude oil prices.
Sun said that global demand for electronic devices is expected to recover in the third quarter, a traditional peak season for the high-tech industry, adding that how far the revival will go will serve as a critical factor to whether the local economy will grow 3 percent or higher.
In response to the GDP growth forecast downgrade by TIER, the Ministry of Economic Affairs (MOEA) said that the ministry will continue its efforts to promote Taiwanese products in the global market, while encouraging local manufacturers to upgrade their technology and restructure their businesses in a bid to improve competitiveness.
Embracing similar hopes that Taiwan's export growth will pick up in the second half of this year, the MOEA said it is very likely that the local economy will grow 3 percent or higher this year.
In May, the government cut its forecast for Taiwan's 2015 GDP growth to 3.28 percent from 3.78 percent. The government is scheduled to update its forecast in mid-August. (By Chen Cheng-wei, Huang Chiao-wen and Frances Huang)


Updated : 2021-09-26 23:49 GMT+08:00