Industry-University Cooperation team of Cathay Pacific University: raising Taiwan's economic growth rate to 3.29% in 2014

Cathay Pacific University Industry-University Cooperation Team: Raise Taiwan's Economic Growth Rate to 3.29% in 2014

(Taiwan Business News) Cathay Pacific Taiwan University Industry-University Cooperation Team said on the 17th that on the basis of the strengthening of "Europe", the recovery of "America" and the stability of "China", the growth momentum of external demand will still be the main driving force for Taiwan's economic growth in 2014. In addition, rising confidence in the national economy, improved job market, rising consumer willingness, rising optimism in the stock market and continued easing of financial conditions all contributed to boosting domestic demand growth momentum. To sum up the above, the team raised Taiwan's economic growth rate in 2014 to 3.29% (original 2.98%), and the forecast interval was 2.8%~3.6% (original 2.5%~3.6%). It is not difficult for this year's economic growth rate to reach "3", and efforts should be able to meet the standard.

Cathay Pacific University's industry-university cooperation team said that due to the relatively weak emerging markets, the IMF slightly lowered the global economic growth rate in 2014 to 3.6% in April. As judged by the team at the previous meeting, emerging markets did not have a major impact on the global economy. On the basis of the strengthening of Europe, the recovery of the United States and the stability of China, external demand will remain the main driving force for Taiwan's economic growth in 2014.

The optimism in the national economy, the improvement in the job market, the rebound in consumer sentiment and the continued easing of financial conditions all contributed to boosting domestic demand and thus economic growth. Based on the above, the team raised Taiwan's economic growth rate in 2014 to 3.29% (originally 2.98%), with a forecast interval of 2.8%~3.6% (originally 2.5%~3.6%).

Cathay Pacific University's industry-university cooperation team pointed out that the economic climate in the second and third quarters was "bright" and the boom was stable. The boom countermeasure signal announced by the National Development Association showed green light for three consecutive months, and the leading and simultaneous indicators continued to rise. As previously predicted by our team, the economic climate in the second quarter may change from "overcast" in the first quarter to "sunny", and it is judged that the third quarter will continue to maintain "sunny", indicating that the economy continues to stabilize. In addition, the probability of economic climate appearing "bright" is higher than 50%, and the probability of "overcast" is lower than 30%, indicating that the risk of short-term economic recession is not high.

Cathay Pacific University's industry-university cooperation team said that the financial situation in the second half of the year is expected to remain "loose": the recent average daily trading volume of the stock market is above 90 billion, the stock price index is also stable above 9000 points, and interest rates are still low, all of which are the main reasons for the financial situation to remain loose.

At present, the 6-month moving average trend of people's optimism and risk appetite for the stock market continues to rise, and the stock market is expected to maintain high-end volatility. Although high inflation has formed pressure on the central bank to raise interest rates, interest rates will not rebound sharply, while the rebound in US bond interest rates will lead to a stronger US dollar, which will make the subsequent Taiwan dollar slightly weaker. All in all, the financial situation will tend to ease and still provide momentum for economic growth.

Cathay Pacific University's industry-university collaboration team pointed out that the key factors affecting economic growth in the second half of 2014 include: (1) the negative effect of high inflation on private consumption. (2)The pace and magnitude of interest rate hikes by central banks and the reaction of financial markets. (3)After the US QE stopped, market interest rate hike expectations emerged. (4)Can low inflation in the euro zone be effectively solved? (5)China's micro-stimulus and targeted easing policy support.