Yuanta-Polaris Research Institute (元大寶華綜經院) yesterday raised its forecast for GDP growth this year from the 2.1 percent it predicted three months ago to 2.25 percent, as exports have performed better amid the launches of next-generation devices by international technology giants.
“Despite fading low-base benefits, exports have maintained a sturdy pickup this year and the trend could be sustained amid an improving global economy,” Yuanta-Polaris president Liang Kuo-yuan (梁國源) told a news conference in Taipei.
The institute now expects outbound shipments to increase 5.48 percent for the whole of this year, up from the 4.89 percent growth it previously predicted.
The improving global economy would lend support to the sales of consumer electronics in the buildup to Christmas in the West and the Lunar New Year in the East, Liang said.
However, it is still too early to pass judgement on the new iPhone models, Liang said.
The new iPhones have drawn lackluster responses since their launch two weeks ago and many analysts have speculated that the new smartphones might not create as big a splash as their predecessors.
That has cast a shadow over the nation’s economic scene, as major Taiwanese technology firms supply chips, camera lenses, casings and other critical components for the phones to Apple Inc.
It is better to wait until the iPhone X hits the shelves because new features always spur demand among loyal iPhone fans, Liang said, adding that he is wary of the nation’s heavy reliance on a few sectors and products.
The acceleration in exports failed to extend to the domestic front, as retail sales underperformed in the first eight months, driving the institute to trim its projection for private consumption from 1.98 percent growth to 1.94 percent growth for this year.
Hotels, department stores, gift shops and bus companies continued to take a hit from the nosedive in the number of Chinese tourists visiting Taiwan.
Furthermore, private investment might dip into negative territory with a 0.18 decline this year, from the 2.9 percent growth the institute forecast last quarter, the institute said.
Imports of capital equipment, mostly intended for technology advancement and capacity expansion, slumped in the past few months and could remain slack for the rest of the year, Liang said.
Leading semiconductor firms have already spent the bulk of their capital expenditure this year, limiting room for spending in the remaining months of the year, he said.
Domestic demand could receive a boost from the government’s Forward-looking Infrastructure Development Program and a 3 percent pay raise for public-sector employees, Liang said, adding that companies in different sectors have announced plans to follow suite next year.
However, most firms are raising one-off bonuses rather than take-home wages, Liang said.
“About 80 percent of firms have not increased wages since 2001,” he said.
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