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Taiwan's 2019 GDP growth forecast to drop further to 2.06 percent

CIER lowers GDP growth forecast for Taiwan.

CIER lowers GDP growth forecast for Taiwan. (CNA photo)

Taipei (CNA) - The Chung-Hua Institution for Economic Research (CIER) further trimmed its forecast for Taiwan's economic growth rate in 2019 to 2.06 percent Wednesday, down by 0.09 percentage points from April.

Amid a slowing global economy, Taiwan's economy is expected to expand by 2.06 percent for the whole of this year, with local consumption and investment the two major engines boosting the domestic economy, said CIER President Chen Shi-kuan (陳思寬).

In the first half of this year, Taiwan's economy expanded by1.7 percent year-on-year because of a higher comparison base, with Q3 and Q4 growth rates forecast to hit 2.12 percent and 2.64 percent, respectively, due to greater momentum from an increase in domestic demand and government investment, Chen said.

The foreign trade sector is expected to register positive growth of 0.43 percentage points for 2019, a turnaround from negative growth recorded last year, while local consumption is estimated to contribute to the growth in Taiwan's economy by 1.63 percentage points, Chen said.

She said, however, that uncertainty arising from the lingering trade war between several major countries will cast a shadow over the world economy, which has shown signs of contraction.

As many China-based Taiwanese businesses have invested more at home amid the trade dispute between the United States and China since the second half of 2018, imports of capital equipment in the first half of 2019 have grown a rise of 15.76 percent year-on-year, with machinery and semi-conductor production facilities posting growth of 20 percent and 40 percent, respectively, year-on-year, she said.

This indicates that investment at home has been warming up, with investment from the government and private sector both set to expand noticeably this year, it said, adding that government investment is expected to increase by 10.15 percent, she said.

Apart from geopolitical risks and ongoing trade disputes between the U.S. and several other countries, adverse effects on Taiwan's economy may emerge from regional economic integration, economic policy changes in major countries, as well as price fluctuations in international commodities and a dwindling Chinese economy, Chen warned. (By Flor Wang and Pan Tzi-yu)

Updated : 2022-01-20 18:40 GMT+08:00