Citigroup, Inc (NYSE: C) Upgrades Forecast for Taiwanese Growth

Citigroup, Inc (NYSE: C) upgraded its 2010 forecast of economic growth for Taiwan from 5% to 7% based on the company’s strong export performance for the year.

Cheng Cheng Mount, chief economist of Citibank Taiwan, said that the higher GDP growth also reflects a recovery in domestic investments and an increase in government spending. He added that the world economy is also on the road to recovery as global demand is picking up.

The new forecast puts Taiwan at second place behind Signapore, among the four countries which are considered to be “Asian tigers.” Singapore is expected to have a 9% GDP growth rate. Citibank predicts South Korea will have a GDP growth of 5.2% for 2010, and Hong Kong 4.7%.

Taiwan posted a record high export figure of $25.5 billion, which was a 58% year-over-year increase as the company witnessed record high technology product shipments. From January through may, Taiwan’s exports totaled $109.26 billion.

Cheng said that with global demand on the rise, many local firms are now expanding their production capacity, boosting overall domestic investments. Cheng expects Taiwan’s fixed investments for 2010 to rise to 13.6% compared to 2009 and predicts a 2.2% increase in local consumption compared to 2009.

Cheng also predicted a 2010 unemployment rate of 5.4%, down from the 2009 number of 5.85%, saying that unemployment rates will drop because of new positions that are being created in the manufacturing sector.