CIER Edges up Taiwan's 2014 GDP Growth Forecast to 3.15%

In response to better-than-expected performance in private spending, private investment, and external trade in the first half, the Chung-Hua Institution for Economic Research (CIER), a major Taiwanese think tank, recently raised its forecast for Taiwan's economic growth this year to 3.15%, up 0.1 of a percentage point from its April prediction, and further predicted that the growth rate would rise further to 3.2% in 2015.

C.S. Wu, president of CIER, explained that the upward adjustment of this year's GDP growth forecast was due mainly to the global economic recovery and Taiwan's strong internal demand. He expressed concern, however, that the island's tight electricity supply and worsening external trade situation might adversely influence its economy.

CIER's estimates and predictions for Taiwan's economic growth for the four quarters of this year are at 3.14%, 2.86%, 3.32%, and 3.26%. The annual growth in the consumer price index (CPI) is forecast at 1.52% for the full year, while growth of the wholesale price index (WPI) may rise from last year's negative figure to a positive 0.86%.

Thanks to the improved global business climate and the devaluation of the NT dollar, Taiwan's first-half exports increased by 1.96% from a year earlier, with ICs and electronic products seeing the highest rise in export value. (JL)

CIER's Growth Predictions for Taiwan's Economic Indicators, 2014-2015                                                             Unit: %
Indicator	2014	2015
GDP	3.15	3.2
Private spending	2.03	1.92
Private investment	3.58	4.5
Exports of goods & services	3.67	5.15
Imports of goods & services	2.93	3.92
WPI	0.86	1.6
CPI	1.52	1.64
Unemployment rate	3.98	3.9

Source: CIER