WARNING: The estimate for this year was based on an increase in exports, but growth might slow next year because the business cycle has not contracted in three years

Taipei Times
Date: Oct 01, 2018
By: Kao Shih-ching  /  Staff reporter

Cathay Financial Holding Co (國泰金控) on Friday raised its GDP growth forecast for the nation this year, but warned of slower growth next year with a risk of stagflation.

The firm revised up its growth forecast to 2.8 percent, from its previous estimate of 2.3 percent, citing strong exports, which grew 5.9 percent in New Taiwan dollar terms in the first eight months of this year, Cathay Financial economic research department assistant manager Achilles Chen (陳欽奇) said.

However, the nation’s GDP growth might slow to 2.2 percent next year, due to the economic cycle, the trade war between the US and China, and the US Federal Reserve’s interest rate hikes, Cathay Financial said.

The trade war would cast a shadow over public confidence and export performance, Chen said, adding that the Fed is expected to raise interest rates three times next year.    [FULL  STORY]