Sat, Jul 12, 2003 - Page 10 News List

Citibank official projects 2.3 percent GDP growth

By Joyce Huang  /  STAFF REPORTER

Despite maintaining an optimistic view about the nation's economic outlook, Citibank (花旗銀行) yesterday projected this year's GDP growth will be 2.3 percent -- a figure less rosy than the government's estimate of 2.8 percent.

"Export performance is the key to boosting the economy in the second half of the year," vice president Cheng Cheng-mount (鄭貞茂) of Citibank Taiwan said yesterday at a presentation on the post-SARS global economic outlook.

Cheng said that the nation's export performance over the next few years hinges closely on the performance of Chinese markets, inasmuch as Taiwan's exports to China grew by 121 percent last month while exports to Hong Kong, the US and Japan declined by 21 percent, 10 percent and 8 percent, respectively.

"As they were unafraid of SARS, China-based Taiwanese businessmen contributed a great deal to the nation's trade surplus in the first half of the year," he said.

According to Cheng, China has completely transcended the negative impact occasioned by the SARS epidemic, with foreign investors showing few signs of withdrawing capital from the manufacturing sector.

With double-digit export growth in China, Citibank revised its projection of China's economic growth rate this year upwards from 6.7 percent to 7.5 percent, Cheng said.

The former economic analyst yesterday further expressed his bullish views regarding the progression of the US currency, saying that the greenback could be expected to gain ground against the weakening euro.

The New Taiwan dollar, however, is being pressured to appreciate against the greenback, whose exchange rate may rise above NT$34.5, Cheng said.

Although foreign investors recently showed great confidence in local stock shares, Cheng said yesterday that the scenario of a simmering market might cool down in the fourth quarter, when the US stock market rebounds to siphon off foreign capital.

Regarding the US' economic development, Cheng said that domestic consumption should pick up to bolster the superpower's economy in the next six months, which will generate great commercial opportunities for foreign exporters to import commodities into the country and later boost domestic business investments.

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