Modest But Positive Port Growth
BMI believes activity levels at Taiwan's main ports will grow at a modest but positive 1.5-4.0% this year.
Box traffic at Taiwan's key ports will remain the most dynamic, but will not exceed 4% growth. Broadlyspeaking, Kaohsiung, Taiwan's largest port, remains the most resilient, not least because it is attracting newinvestment. Although political risk factors are beginning to rise, the policy of cross-Strait integration isexpected to continue.
We are holding to our 3.5% GDP growth forecast for Taiwan in 2015. Although the global outlook hasweakened, the domestic economy looks positive, with credit growth on an uptrend and investment ininfrastructure remaining positive. Export growth continued strongly in Q414, although lower than in thepreceding quarter. Private consumption cooled, possibly reflecting a series of scandals regardingcontaminated food. Political risk factors may have also caused something of a pause, given a landslideopposition victory in the November local elections. Notwithstanding this, we see domestic demandremaining strong this year, supported by infrastructure development and construction (includingpreparations for the 2017 Universiade summer games). Rising real wages and falling oil import prices willalso contribute to growth. However, we see exports exposed to headwinds from mainland China's slowingGDP growth and from Taiwan's overdependence on technology-related shipments, which exposes it todownturns in the global electronics business cycle. Our medium-term outlook is for growth to average 3.9%a year in the five years to 2019.
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