The pace of economic growth will slow in the second half of this year and private investment will be the main force keeping it going, Hu Chung-ying, deputy minister of the Council for Economic Planning and Development (CEPD), said Monday. Hu made his predictions after the CEPD reported earlier in the day that Taiwan's economy flashed a 'yellow-red' light in May, indicating the local economy is booming and ending a four-month overheating 'red light' streak. The growth rate will slow in the next six months due to the relative high comparison base for the same period last year, Hu said. He added, however, that with stable growth in production, trade and consumption, and an improvement in the labor market, overall economic growth will continue. Noting that economic growth is closely related to private sector confidence, Hu said a planned economic cooperation framework agreement that Taiwan will soon sign with China is expected to boost private enterprises' confidence and spur investment in Taiwan by foreign businesses and overseas Taiwanese companies. Nonetheless, the introduction of the Industry Innovation Act and a revised bill reducing the corporate income tax to 17 percent will also help stimulate private investment and consumption and provide good momentum for growth in the second half of this year, Hu added. He also noted that the Economist Intelligence Unit (EIU) on June 9 sharply raised its forecast for Taiwan's GDP growth this year to 8.5 percent from 5.6 percent, largely based on private investment. The key for EIU to revise upward its forecast was the ECFA, because the unit predicted the agreement will give Taiwan an edge in competing with South Korea in the Chinese market. It also forecast the deal will be conducive to Taiwan's efforts to join regional economic blocs or establish free trade agreements with other countries, according to Hu. 