The Taiwan Research Institute yesterday cut its forecast for the nation’s GDP growth this year to 0.92 percent. Photo: Wang Meng-lun, Taipei Times
By Crystal Hsu / Staff reporter
The Taiwan Research Institute （TRI, 台湾综合研究院） yesterday cut its forecast for the nation’s GDP growth this year to 0.92 percent, down from the 2.06 percent it predicted six months earlier, as the global economy’s growth slows, depressing exports and private investment in Taiwan.
The projection faces more downside risks than upside surprises going forward, as uncertainties at home and abroad continue to unfold, the Taipei-based think tank said.
“It would be lucky if GDP growth ends up above the 1 percent mark, because we do not see how the economy can come out of its listless state,” TRI founder Liu Tai-ying （刘泰英） told an economic forum.
The government has struggled to restructure the economy and has had difficulty finding money to sponsor planned reforms, despite an estimated NT$3 trillion （US$92.64 billion） in savings, with NT$1 trillion stashed away in the central bank and state-run enterprises, Liu said.
The vast reserves will remain idle if the public and private sectors refuse to take bold moves to fix the economy, Liu said.
Private investment, which grew 2.75 percent last year from 2014, might pick up only 0.97 percent this year, with most firms shying away from capacity expansion amid soft external demand, institute president Wu Tsai-yi （吴再益） said.
Exports, including labor and goods, might see a 0.51 percent increase this year after contracting 0.16 percent last year, Wu said.
The forecast of improvement has more to do with a low base of comparison from last year than evident signs of catalysts on the horizon, Wu said.
Economists have predicted a better second half of this year in terms of GDP, on the belief that the release of Apple Inc’s iPhone 7 will create a bigger splash than its iPhone 6S models, benefiting Taiwanese component suppliers.
Against that backdrop, consumers would refrain from active spending, Wu said, forecasting private consumption to increase by a mild 1.35 percent this year, from 2.34 percent last year.
Dachrahn Wu （吴大任）, a professor at National Central University’s Research Center for Taiwan Economic Development, which is responsible for compiling the nation’s consumer confidence index, said the gauge has been declining for months, in line with disappointing economic data.
The trend will hurt private consumption if left uncurbed, Dachrahn Wu said.
He also cast doubt over the private investment forecast, saying that a potential electricity supply shortage could dampen investment interest, not to mention growing competition from China, South Korea and elsewhere.
While the government can do little to change the global technology cycle, it can take steps to make Taiwan more business friendly, with steps such as guaranteeing a stable supply of electricity, Dachrahn Wu said.
The institute expects consumer prices to climb 1.16 percent, while the New Taiwan dollar will trade at an average of NT$32.94 against the US dollar this year.
新闻来源：TAIPEI TIMES
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