Officials say `worst is over'

Taiwan's economy may begin to recover in the second quarter in tandem with the lukewarm recovery of the global economy and anticipated growth in the local information technology sector, government officials said yesterday.

"The worst is over," said both Minister of Economic Affairs Lin Hsin-yi (林信義) and Chairman of the Council for Economic Planning and Development Chen Po-chih (陳博志), basing their optimism on various forecasts by economic institutions.

Both Lin and Chen made the remark during press conferences yesterday while outlining their administrative achievements over the last year and announcing their plans for this year.

According to Lin, some upstream IT sectors -- such as makers of integrated circuits, multi-layer ceramic capacitors and TFT-LCD panels -- are expected to see larger export growth this year on higher demand for those products.

Overall, Taiwan's exports will grow 3.3 percent this year from a 16.9-percent decline last year, he said.

Other positive factors for the nation's economic growth include anticipated approval by the legislature of a draft amendment to the public debt law, Chen said.

The passage of the amendment by lawmakers will allow the government an extra NT$100 billion (US$2.85 billion) in public spending every year over the next five years, which should contribute to boosting domestic demand, Chen said.

The council maintains a 2.2 percent to 2.7 percent economic growth forecast for the nation this year, compared with the Directorate General of Budget, Accounting and Statistics (DGBAS) forecast of 2.23 percent and Academia Sinica's 3.08 percent.

Lin said the public may see a slow pace of recovery this year.

"The next one and a half years will be critical -- if domestic industry fails to upgrade or businesses [fail to] transform, we should worry," he warned.

Lin had warned the public earlier last year that a time of pain was coming and that industry may have to take between two and three more years to fully upgrade.

Indeed, the nation's industrial upgrading and structural transformation have lagged according to a recent report by the CEPD, which said the global economy is expected to swing upward in the middle of next year, but Taiwan's exporters and job-seekers may not benefit as much as they would have in the past.