Taiwan's 2014 GDP Forecast to Jump to 5.7%

Taiwan's GDP will likely jump from 2013's 1.6% to 5.7% this year, lower than Singapore's 6%, but higher than Hong Kong's 4.9% and South Korea's 4.7%, according to the Hong Kong-headquartered CLSA Asia Pacific Markets.

CLSA's prediction of 5.7% for Taiwan's GDP this year is much higher than that forecast by many foreign institutions at around 3%. A senior manager at CLSA says that based on the statistics compiled from July 2009 to December 2013, the correlation of Taiwan's purchase management index (PMI) and the global PMI reached 0.83, which was the highest among all Asian economies. So, if the global economy, particularly in the U.S. and Europe, continue to  recover, Taiwan's economy will surely benefit.

The proportion of Taiwan's export to Europe is the second highest among Asian economies, next only to Malaysia. So if the GDP growth of the euro zone rises from -0.5% to the predicted 2.5% this year, then Taiwan's export will likely be buoyed significantly. In addition, the U.S. is forecast to see GDP growth this year expand to 2.4% from 2013's 1.8%, to also help boost  Taiwan's export.

Besides, CLSA predicts that the weighted share price index in Taiwan's stock market may reach a high of 9,600 for 2014, with the U.S.-based Goldman Sachs Group predicting the  figure to reach 9,500. (JL)