CHIER raises Taiwan's economic growth projection to 4.65% for 2010.

Taipei, Oct. 21, 2009 (CENS)--Chung Hua Institution for Economic Research (CHIER), Taiwan's leading think tank, recently adjusted upwardly its forecast for Taiwan's economic growth by one percentage point to 4.65% for 2010, even higher than 3.92% predicted by the Cabinet-level Directorate General of Budget, Accounting and Statistics (DGBAS).

Wang Lee-rong, director of the Center for Economic Forecasting at CHIER, noted that CHIER's prediction of Taiwan's economic growth at 4.65% for 2010 is modest and conservative since the government is expected to expand investments next year in green energy, high-tech industry, and emerging industries, not to mention that Taiwan and China are very likely to sign Economic Cooperation Framework Agreement (ECFA), which is believed to help boost Taiwan's economy.

If the two sides sign the ECFA, then Taiwan's economic growth is estimated to chalk up by 1.65-1.72 percentage points and the employed population to increase by 257,000-263,000 persons. Hsu Chihchiang, director at the Research Center for Taiwan Economic Development of the National Central University, said that more private investments would be launched on the island after the ECFA is signed.

CHIER further estimated that Taiwan's economic growth for the fourth quarter of this year might reach 5.31% and its private investment might see a sharp rise of 8.16% to hit a six-year high in 2010. And the unemployment rate is projected to drop to 5.76% from this year's expected 5.88%, while the private spending might see a 1.91% growth, up from near 0% in 2009.

However, Wang worried that if oil and food prices go up sharply, then Taiwan's economic growth for 2010 is likely to fall to 4%.

CHIER's Forecasts on Taiwan's Economic Performance
(2008, 2009 & 2010) Unit: %

                      Annual    Annual    Annual
                      growth    growth    growth
Item                  (2008)    (2009)    (2010)

Economic growth         0.06     -3.72     4.65
Private investment    -13.28    -24.77     8.16
Private spending       -0.30      0.46     1.91
Exports of goods
  & services           -0.03    -11.38     9.72
CPI                     3.53     -0.63     0.78

Source: CHIER