Taipei, July 19 (CNA) Academia Sinica, Taiwan's top academic research institution, said Wednesday that it has raised its forecast for Taiwan's gross domestic product (GDP) growth for 2017 to more than 2 percent on the back of improved export performance.
According to the Institute of Economics under Academia Sinica, GDP is expected to grow 2.18 percent from a year earlier, an upgrade from its previous forecast of a 1.68 percent increase made in December.
Academia Sinica is the most optimistic research institution in Taiwan about the country's GDP growth, compared with 2.14 percent forecast by the Chung-Hua Institution for Economic Research, 2.10 percent estimated by the Yuanta-Polaris Research Institute, 2.04 percent anticipated by the Taiwan Institute of Economic Research, and 2.01 percent forecast by the Taiwan Research Institute.
According to Kamhon Kan of the institution, the local economic fundamentals have been better than expected, so his institution was simply one of several think tanks in Taiwan to upgrade the 2017 GDP growth forecast to more than 2 percent.
Echoing Kan, Ray Chou, a fellow researcher of the Institute of Economic Research, said that Taiwan's economy has benefited from a recovery in the global economy, which has pushed up demand, paving the way for stronger export performance from Taiwanese exporters.
Academia Sinica has raised Taiwan's merchandise and service export growth for 2017 to 4.23 percent, up from an earlier forecast of 4.13 percent, while the institution has also upgraded its forecast for Taiwan's merchandise and service import growth to 4.04 percent from 3.76 percent.
Higher outbound exports have led local exporters to increase their investment in production expansion. As a result, Academia Sinica has raised Taiwan's private investment growth to 2.36 percent from 1.14 percent, while the country's capital formation growth has been also upgraded to 2.57 percent from 1.04 percent.
In addition, the top research institution has raised Taiwan's private consumption growth to 1.80 percent from 1.30 percent.
After growing 2.60 percent in the first quarter, Academia Sinica has forecast that Taiwan's GDP growth will hit 2.00 percent, 2.06 percent, 2.07 percent, respectively, in the last three quarters. Chou said that China, the largest buyer of Taiwan-made goods, posted a better-than-expected 6.9 percent increase in its GDP for the second quarter of this year, which served as a driver to economic growth. According to Chou, China accounts for about 40 percent of Taiwan's exports.
Kan said that due to the launch of the next-generation iPhones later this year, massive orders placed with Taiwanese suppliers to Apple Inc. are expected to help GDP growth stand at more than 2 percent in the second half of the year.
However, Chou warned that Taiwan still faces uncertainty such as rising trade protectionism in the West and tension in the region, while local policies, including rigid work rules and pension reforms, could have an impact on private consumption.
