The Taiwan Institute of Economic Research lowered its forecast for Taiwan’s GDP growth this year to 3.11%. This is 0.59 percent points lower than its earlier estimate of 3.7%.
The think tank said that weakening global demand has made it turn cautious about Taiwan’s export performance. In June, Taiwan’s exports fell 13.9% from a year earlier, marking the fifth month in a row that the country has registered a decline in exports.
With investors growing reluctant to spend due to slower global demand, the think tank has cut its forecast for Taiwan’s private investment growth. It also said private spending is expected to drop.
However, the think tank said that global demand for electronic devices is expected to recover in the third quarter, a traditional peak season for the high-tech industry. It said how far the revival will go will be a critical factor that determines whether the local economy will grow 3% or higher.