TAIPEI, April 24 (Xinhua) -- Taiwan's economy will grow 3.7 percent this year as the global economy recovers steadily, the Taiwan Institute of Economic Research (TIER) forecasted on Friday, revising up its prediction by 0.03 percentage points from a previous projection in January.

A 3.7-percent GDP growth would still be slower than the 3.74 percent seen in 2014.

The global economic recovery is likely to continue but Taiwan's economic outlook is still affected by uncertainty factors such as the possible rate-hike by the U.S. Federal Reserve and the island's worst water shortage in decades, according to the TIER.

Rotational cuts in water supply have been enforced in the island's northern parts including Taoyuan, Hsinchu and New Taipei City, while proposed electricity cuts for industrial use might also affect economic activity.

Taiwan's exports slumped 8.88 percent year on year in March, industrial output gained 5.73 percent year on year for the first quarter, with the trade surplus more than doubling to 13.42 billion U.S.dollars, the TIER said.