Research institute lowers Taiwan 2016 growth forecast

A Taiwanese research institute cut its forecast for the island's annual growth to 1.57 percent on Monday, saying in a report that weak global economic recovery is likely to hurt exports and consumer confidence.

The figure is 0.27 percentage points lower than the previous forecast made in November by the Taiwan Institute of Economic Research.

It forecast growth in the first quarter at 0.29 percent year on year, as the pillar electronics sector enters its slack season and there will be fewer working days during the Chinese Lunar New Year holidays.

In the following three quarters, growth rates are respectively projected at 1.42 percent, 2.13 percent and 2.37 percent.

With major global institutions revising down their forecasts for the global economy, the picture is gloomier than feared. Taking into consideration other factors including falling oil prices and volatile stock markets around the world, consumer confidence will take a knock in Taiwan, the report said.

Private consumption will grow by 2.42 percent in 2016, down by 0.37 percentage points from the institute's previous forecast.

Goods exports may drop by 1.75 percent, compared with the previous forecast of a 3.09-percent rise, while imports may decline by 5.51 percent, down from the previous 3.52-percent rise, according to the report.

Taiwan's economy shrank by 1.01 percent in the third quarter of 2015, the worst quarterly growth in six years and the first contraction since the fourth quarter of 2009. Endi