Taiwan's economic growth this year will be 3.95 percent, less than the 4 percent figure bandied about earlier, according to a report reaching in Hong Kong from Taipei Wednesday.
According to the prediction made by The Taiwan Institute of Economic Research (TIER) in a report released Wednesday on its economic forecast for the overall domestic economy, although Taiwan maintains growth in its exports, domestic investment by the government and private sectors has been insufficient, leading to sluggish domestic demand.
After reviewing related figures, the institute predicted that it will be difficult to keep an economic growth of four percent.
The institute urged the government to improve the investment climate and promote private consumption to improve economic development.
Halfway through 2006, the report said, the good side is that Taiwan's exports will continue a steady increase because of stable growth in the United States, Japan and Europe. The down side, however, is the impact of soaring oil prices.
The institute estimated that exports will be worth 219.4 billion new Taiwan dollars (6.65 billion U.S. dollars) and imports will be worth 199.8 billion new Taiwan dollars (6.05 billion U.S. dollars) this year, with the trade surplus shrinking to 19.6 billion new Taiwan dollars (59.39 million U.S. dollars) from 26.4 billion new Taiwan dollars (80 million U.S. dollars) estimated in April.
Private consumption is expected to maintain the momentum of 2005 with the continued improvement of the unemployment situation and stable consumer prices. But the surging oil prices and persistent credit card debt problem, as well as rising interest rates will also have negative impact on private consumption, and it is estimated that private consumption growth this year will be only 2.31 percent.
The annual increase of the consumer price index is estimated at1.88 percent, mainly because of the hikes of electricity rates in the second half of the year. World oil price is forecast at between 60 U.S. dollars and 65 U.S. dollars per barrel this year, which is not too different from last year |
