Top Economics Institution Forecasts 2.45% Growth for Next Year
2018/12/06 | By CENSAcademia Sinica Institute of Economics lowered its forecast for this year's economic growth by 0.01 percentage points to 2.4% and offered its estimations for next year's forecast at 2.45%.
The figure announced by the Institute of Economics is slightly higher than that laid out by the central government's Directorate General of Budget, Accounting and Statistics at 2.41%.
Institute of Economics Director Kan Kamhon said with this year's economy seeing a sudden downward spiral, whether the fourth quarter could maintain growth above 2% remains to be seen.
The global financial sector has seen turbulent times since the global economy was shaken by the trade tensions between China and the U.S., the institute has stated. The pacing of growth of economies around the world is unbalanced, however, with the U.S. performing aggressively while Japan and Europe have shown less than desirable growth, due to the trade war. China was especially shaken by the trade tensions and tariffs slapped on by the U.S., and Taiwan's export and consumer demands were also struggling as a result.
Next year's global economy will likely continue be impacted by the trade war and decreased domestic demand from China. To top it off with the U.S.' curbing of tariffs, the financial sector is likely to turn to austerity, leading to slowed down growth around the world. The Institute of Economics therefore estimates Taiwan to be buoyed by a 2.45% growth.
While a number of factors, ranging from an uncertain financial market, struggling domestic stocks market and a falling consumer confidence index, have contributed to the lukewarm consumer demand, the institute expects to see a slight comeback next year thanks to increased minimum wages coming into effect next year, therefore offering a forecast of 2.26% growth for consumer demand.
As for domestic investments, the government is currently actively removing investment obstacles and pushing for local infrastructure. The institute says there are plans being drawn up to attract Taiwanese businesses back from overseas, especially those from China.
Also, with the end of local elections this year, the delayed retirement of Taiwan's nuclear power plants are also positive factors taken into consideration by companies, prompting the institute to predict a 4.31% growth of private investments next year.
As for exports, China's decline of economic growth has largely stalled Taiwan's own import and export demands; the institute expects to see export and imports for goods and services to see growth up to 3.11% and 3.01% respectively.
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