TIER forecast of Taiwan 2024 GDP growth rate remains 3.15%

Taipei, Jan. 26 (CNA) The Taiwan Institute of Economic Research (TIER) on Friday kept its forecast of Taiwan's economic growth for 2024 at 3.15 percent, the same as its previous forecast in November 2023.

At a forum held Friday on economic and industry trends in 2024, TIER said Taiwan's economic growth will mainly depend on consumer spending and investment.

TIER Economic Forecasting Center Director Gordon Sun (孫明德) said at the forum that the Red Sea Crisis and El Niño have increased the cost of freight logistics, and economic trends this year will depend on the situation in the Middle East.

The price of raw materials, economic outlook in China, whether America's consumption momentum continues, as well as the monetary policies pursued by major central banks around the world, will affect Taiwan's trade and investment, TIER added.

In terms of trade, despite a decline in overseas orders, imports and exports for the first three quarters of 2023, Taiwan could see a revival in trade in 2024, as the country's trade should benefit from an expected global recovery in commerce and rising demand for semiconductors, TIER said, adding that the forecast growth in global semiconductor sales will boost Taiwan's export.

TIER forecast Taiwan's exports and imports will grow at a rate of 6.34 percent and 7.68 percent, respectively, in 2024, 1.31 and 2.24 percentage points higher than its previous forecast.

It also pointed out that the semiconductor industry will see a full recovery only in the second half of 2024, due to the slow recovery of IC design and manufacturing.

As for domestic demand, the sales of retail and hospitality industries both reached new high in 2023, an indication that the momentum of private consumption remains strong, TIER said.

There is still price increase pressure in the service sector, which will cause the rise in the price of goods but at a slow pace, according to TIER.

As a result, TIER estimated a growth of 1.95 percent in the consumer price index in 2024, an increase by 0.15 percentage points compared with its previous forecast.

In addition, other surveys conducted by TIER have shown that workers in the manufacturing, service and construction industries now have a positive view of the economy, which is also a sign of recovery.