《TAIPEI TIMES》 Yuanta upgrades Taiwan’s GDP growth to 11.05％

Shipping containers are stacked at the Port of Keelung on June 18. Photo: CNA

DEMAND: Yuanta projected exports to increase 25.49%, domestic investment to grow 8.38% and private consumption to expand 4.99% from last year

By Chen Cheng-hui / Staff reporter Yuanta Securities Investment Consulting Co （元大投顧） has upgraded its forecast for Taiwan’s GDP growth this year to 11.05 percent from the 8.72 percent it estimated in March, as artificial intelligence （AI）-driven growth momentum remains resilient despite a slump in the housing market.

“Given the continued strength in exports, several institutions have been raising their forecasts for this year’s economic growth to above 9 percent since May, higher than Taiwan’s average growth of 3.11 percent over the past 10 years,” Yuanta said in a report released on Thursday last week.

Yuanta’s GDP growth forecast is higher than the central bank’s 9.45 percent estimate issued earlier this month and the Directorate-General of Budget, Accounting and Statistics’ 9.64 percent projection unveiled last month. It is also the highest forecast by domestic and foreign institutions.

The National Development Council’s business climate monitor last week showed that Taiwan’s economy last month remained in the “red” zone, signaling overheating, for the sixth consecutive month, with the outlook in the months ahead still promising.

Yuanta’s forecast shows its upward revision is driven by exports, domestic investment and private consumption, with exports projected to increase 25.49 percent from a year earlier, domestic investment to grow 8.38 percent and private consumption to expand 4.99 percent.

“Taiwan’s technology hardware sector is at the core of the AI industry chain, driving exports to remain at a high level,” Yuanta said in the report.

“While the AI wave has continuously led major cloud service providers to revise their capital expenditures upward, current investment levels have not yet reached bubble levels,” it said. “Even though the housing market has not yet stabilized, increased AI capital expenditure and inventory replenishment are driving investment growth.”

Wealth effects from strong stock market performance, alongside a stable job market and continued wage growth, also support domestic consumption, Yuanta said.

As the legislature has not approved the government’s budget plans for next year, Yuanta said it remains conservative about government consumption, government investment and public investment in the year ahead, expecting each to increase 2 percent on average, compared with growth of 2.9 to 7.6 percent over the past five years.

Yuanta projected the economy could expand 6.18 percent next year, albeit with room for upward revisions, it added.

Regarding headline inflation, Yuanta lifted its consumer price index （CPI） growth forecast by 0.12 percentage points to 1.95 percent for this year, citing the impact of conflicts in the Middle East.

It forecast CPI could increase 1.98 percent next year.

“Although the easing of tensions between the US and Iran has led to a decline in international oil prices, alleviating pressure on energy prices, domestic demand in Taiwan is gradually recovering, and core CPI is expected to remain elevated in the next two years,” Yuanta said.

新聞來源：TAIPEI TIMES