A Taiwanese economic think tank said Thursday it has cut its 2005 gross domestic product growth forecast for Taiwan to 3.31% from its previous estimate of 4.41% given in April.
The reduction was prompted mainly by worse-than-expected performance in the second quarter to June, when GDP increased slightly to 2.06% after a first-quarter rise of 2.54%, the Taiwan Institute of Economic Research (TIER) said in a statement. The lower 2005 forecast is justified even though GDP should be able to grow more strongly, by 4.16% and 4.36% respectively, in the third and fourth quarters of the year, it said.
Taiwan is expected to generate a trade surplus of US$ 8.20 billion dollars this year on the back of 8.65% growth in commodity exports to 189.10 billion and 7.74% growth in imports to 180.90 billion according to TIER. These projected growth rates compare with the much more robust expansion of 20.71% and 31.94%, respectively, registered in 2004.
On the foreign exchange front, TIER said it sees little room for the Taiwan dollar to appreciate much further despite the yuan's recent revaluation by 2.1%.
Copyright Agence France-Presse, 2005