Economy not recovering as fast as was expected

The recovery of Taiwan's export-oriented economy is slower-than-expected this year, with an annual growth rate of 3.05 percent, down slightly from an earlier prediction of 3.09 percent, a government-funded economic think tank announced yesterday.

"Taiwan's year-end economic growth rate has been adjusted slightly downward as the growth is dragged down by global uncertainty, including the fear of terrorists attacks and a possible war against Iraq," said Wu Rong-I (吳榮義), president of the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) in a forum on the outlook of Taiwan's economy yesterday.

According to Wu, Taiwan's economy had been steadily recovering in the first six months of this year, reaching an average growth rate of 2.57 percent. Economic growth hit 3.98 percent for the second quarter, the highest quarterly growth figure in three years.

However, Wu said, Taiwan's overall economic situation is weak, mainly as a result of the slowdown in the global economic recovery.

Wu said Taiwan's economic recovery appears to be losing steam. Except for foreign trade, only three categories -- government investment, private consumption and private investment -- are all falling from levels seen the previous year.

For the fourth quarter, TIER estimated, economic growth will hit around 3.25 percent, with foreign trade expected to be brisk, while growth in government investment, private investment and private consumption are all expected to remain flat or decrease.

Meanwhile, Vice Premier Lin Hsin-yi (林信義) yesterday predicted growth of 3.1 percent in 2002 and 3.5 percent in 2003.

He made the comments speaking yesterday in a seminar on international marketing strategy.

Lin said that the growth rate, up from negative growth of 2.2 percent in 2001, will be achieved by expanding global trade and by the government's continued efforts to create a better environment for investment in Taiwan.