The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) on Friday kept its forecast of Taiwan’s economic growth for this year at 3.15 percent, the same as its previous forecast in November last year on the back of stable consumer spending and investment.
However, the situation in the Middle East, the price of raw materials, the economic outlook in China, consumption momentum in the US and the monetary policies of major central banks would affect Taiwan’s trade and investment, the institute said at a forum on economic and industry trends.
Despite a decline in overseas orders, imports and exports for the first three quarters of last year, Taiwan could see a revival in external trade this year, the institute said, citing an expected global recovery in commerce and rising demand for semiconductors.
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Taiwan’s exports and imports are forecast to grow at 6.34 percent and 7.68 percent respectively this year, 1.31 and 2.24 percentage points higher than its previous forecast, the institute said.
The semiconductor industry is expected to see a full recovery only in the second half of the year, due to the slow recovery of IC design and manufacturing, it said.
As for domestic demand, sales in the retail and hospitality industries reached new highs last year, an indication that private consumption momentum remains strong, despite price increase pressure in the service sector, it said.
The institute predicted annual growth of 1.95 percent in the consumer price index this year, up 0.15 percentage points compared with its previous forecast.
In addition, other surveys conducted by TIER have shown that workers in the manufacturing, service and construction industries have a positive view of the economy, which is also a sign of recovery, TIER Economic Forecasting Center director Gordon Sun (孫明德) said at the forum.
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