Taipei, Nov. 8 (CNA) The Taiwan Institute of Economics Research (TIER) on Wednesday said it expected the country’s gross domestic product (GDP) to grow by 3.15 percent in 2024, citing stable domestic demand, rebounding exports and global recovery of trade in goods.
TIER also cut its forecast for Taiwan’s 2023 GDP growth from 1.66 percent projected in July to 1.43 percent.
Major international economic forecasters project global economic growth in 2024 to be slightly lower than that in 2023 because of continued weakness in the world’s two largest economies, the United States and China, due to sluggish consumption and investment, TIER said in a statement.
The forecasting was based on the belief that although growth in other major economic entities, such as Europe, is expected to rebound and the performance in emerging markets and developing economies is projected to be better than in 2024, this is still not enough to bolster growth in the two largest economies, TIER said.
However, Taiwan’s GDP is forecast to grow by 3.15 percent in 2024, 1.72 percentage points higher than the newly revised 1.43 percent growth forecast for 2023, TIER said.
Generally speaking, Taiwan’s export orders and annual growth in exports have exited a recent fallow spell and began picking up, moving into positive territory in September, TIER said.
According to TIER, the upward trend is expected to continue through 2024.
Taiwan’s economic growth in 2024 will mainly rely on consumption and investment, and recovery of external demand, it said.
TIER forecast that private investment will turn positive and rise to 3.66 percent in 2024 as semiconductor investment picks up, coupled with the continued investment demand for emerging technologies and net zero emissions.
Meanwhile, private consumption growth is projected to reach 2.54 percent next year due to a high base of comparison in 2023, TIER said.
TIER President Chang Chien-yi (張建一) told a news conference Wednesday that domestic and international economic indicators are likely to remain depressed as part of a U-shaped recovery set to reach completion in the first half of next year.
However, Chang said that the extent and timing of the recovery still depended on inflation and a rebound in global demand.
In terms of consumer prices, TIER said that Taiwan’s consumer prices may not continue to soar but forecast 1.8 percent growth in the consumer price index (CPI) for 2024 amid signs of economic improvement and taking into account such factors as climate changes, a serious labor shortage during the post-COVID-19 period and geopolitical risks.
Looking ahead, TIER said there were multiple challenges facing the global economy, including whether the growth momentum of private consumption continues, movements in raw material prices, the prospects of China’s economy, and monetary policies of various countries’ central banks.
In addition, Liu Pei-chen (劉佩真), a researcher at TIER’s Taiwan Industry Economics Database, said that the intensifying US-China trade war had increased awareness of the strategic importance of the semiconductor industry.
In such a situation, Taiwan should leverage semiconductor supply chains to strengthen cooperation with main supplying countries to expand its global manufacturing footprint further to maximize Taiwanese enterprises’ commercial benefits, Liu added.
(By Pan Tzu-yu and Evelyn Kao)