Chen Po-chih (陳博志), chairman of the Council for Economic Planning and Development, said it may be difficult for the country to achieve a 3 percent GDP growth rate this year, adding that Taiwan may follow Singapore to showing a negative growth rate in the second quarter.
"Economies in both Singapore and Taiwan rely heavily on high-tech industries, and the global economic slowdown has had a serious impact on that sector. Although Singapore has a more developed service sector than Taiwan, that hasn't prevented the city-state from encountering an economic contraction ... Taiwan's situation is very worrisome," Chen said.
On Tuesday, Singapore drastically lowered its economic growth estimates for 2001 after it saw growth contract by 0.8 percent in the second quarter compared to the same period last year.
Compared with the govern-ment's previous forecast of 4.02 percent growth rate for 2001, Chen said that it would be difficult for Taiwan to achieve a 3 percent growth in GDP for 2001.
"But it's not impossible if the US economy starts recovering soon," he said.
Taiwan's growth in the first quarter fell to a 26-year low of 1.06 percent from a year earlier, and the council forecasts a 1 percent rise for the second quarter after seeing sharp declines in imports, exports and industrial output.
But most local economic institutions, such as Academia Sinica (
Academia Sinica will release its updated prediction for Taiwan's economic growth this year, and it will reportedly adjust downward its forecast to below 4 percent, compared with its previous forecast of 5.21 percent.
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