Standard Chartered retains 2.1% growth forecast for Taiwan's 2019 GDP
SCB senior economist Tony Phoo, who is based in Taipei, said Thursday that Taiwan's economy is expected to benefit from increasing investments by overseas Taiwanese companies that are seeking to avoid the impact of the trade frictions between the United States and China.
The growing domestic investments are expected to offset the effects of weakening global demand amid the Washington-Beijing trade disputes, Phoo said.
As a result, the bank has decided to maintain its 2.1 percent growth forecast for Taiwan's economy in 2019, after lowering its projection in April from 2.5 percent, he said.
The economic forecast, however, remains below that of the Directorate General of Budget, Accounting and Statistics (DGBAS), which has raised its 2019 projection by 0.27 percentage points to 2.46 percent.
Both the DGBAS and Standard Chartered have said that domestic demand will be the main driver of Taiwan's economic growth this year.
According to Standard Chartered, Taiwan reported a 41.6 percent year-on-year increase in capital equipment imports in June, a jump from a 10.8 percent in the first five months of year, with semiconductor manufacturing equipment imports soaring 97.3 percent from a year earlier.
Phoo said the figures indicated that many local manufacturers were keen to invest in expanded production.
The semiconductor sector, which accounts for about 30 percent of Taiwan's exports and 17 percent of the country's GDP, will be a major driver of the country's economic growth this year, he said.
The Taiwan economy can be expected to grow by 2 percent or more this year, although it may be adversely affected by the slowdown of China's economy amid uncertainty over the Beijing-Washington trade tensions, Phoo said.
Furthermore, as inventory adjustments in the global tech industry continue, Taiwan's export-oriented electronics sector could see some risks for the rest of the year, he said.