The nation’s investment rate is expected to hit a three-year high next year, as local tech firms expand production and boost research and development, the latest GDP data compiled by the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed.
The investment rate is derived by calculating gross capital formation as a percentage of GDP.
The DGBAS on Nov. 29 revised up its economic growth forecast for the nation to 4.27 percent for this year from the 3.90 percent it predicted in August, as the artificial intelligence (AI) boom drives up exports of electronic components and information and communication technology products.
Photo: Ritchie B. Tongo, EPA-EFE
The agency also raised its GDP growth forecast for next year to 3.29 percent from its estimate of 3.26 percent in August.
To capture expanding AI business opportunities, chip manufacturers have been expanding advanced manufacturing processes and high-end packaging and testing capacity, as well as boosting spending on research and development, which in turn has spurred many downstream manufacturers in the supply chain to likewise expand their investments, the agency said.
The growth in domestic investment has also been driven by transportation operators expanding their capacity to meet market demand, it said.
Overall, private investment is forecast to grow 4.73 percent this year, up from the 3.89 percent the DGBAS estimated in August, and to increase 5.57 percent next year, compared with the previous forecast of 5.13 percent, it said.
Combined with public investment, the nation’s gross capital formation is predicted to grow 5.42 percent this year and 5.88 percent next year, the agency said.
With gross capital formation estimated at NT$7.047 trillion (US$217 billion) and GDP at NT$26.814 trillion next year, the agency forecast an investment rate of 26.28 percent.
That would be the highest in three years — compared with an estimated 25.59 percent for this year and 25.63 percent last year, the data showed.
The investment rate reached a 27-year high of 28.07 percent in 2022 as the semiconductor industry, the renewable energy industry and returning Taiwanese businesses together drove growth in domestic investments, the agency said.
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