Mon, Jun 28, 2004 - Page 10 News List

Private sector drives economic growth

RECOVERY The Ministry of Economic Affairs's Statistics Department says Taiwan's economy grew 6.28 percent in the first quarter, fueled by private sector investments

CNA , TAIPEI

Continuous growth in private sector investments is part of the driving force behind Taiwan's steady economic growth this year, government sources reported yesterday.

Paralleling the global economic recovery, which began late last year, Taiwan's economy is expected to continue to pick up steam in the second half of this year, although the growth will be at a slightly slower pace than that in the first half of the year, said Chang Yaw-tzong (張耀宗), director-general of the Statistics Department under the Ministry of Economic Affairs.

Quoting forecasts by the International Monetary Fund and the World Bank, Chang said that the global economy has been recovering strongly since the second half of last year, resulting in good performance for this year, with the annual growth expected to top 4.6 percent. Growth in the US, which remains the top economic powerhouse in the world, was 4.2 percent in the first quarter of this year and the country's annual growth is predicted to top 4.6 percent for 2004.

Taiwan has witnessed similar growth, Chang said, adding that the domestic economy advanced at a high of 6.28 percent in Q1, mainly powered by growing investments and consumption in the private sector. An even better 6.77 percent is expected for Q2 before expansion slows a bit in Q3 and Q4 to end at 5.41 percent growth for the entire year of 2004, he noted.

Chang said economic expansion in the second half of 2004 will remain brisk, although at a slower pace than the first half of the year due to factors that include the possibility that the interest rate of the US dollar may continue to rise, the uncertainty of the Middle East situation and the impact of China's recent efforts to cool its overheated economy.

Meanwhile, Minister of Economic Affairs Ho Mei-yueh (何美玥) said that she expects the values and volumes of investments and export orders to be received in the private sector in the second half of this year will be as much as those posted in the first half of the year, with single-month export orders expected to exceed a record high of US$18 billion later this year because of seasonal factors.

The Ministry of Economic Affairs feels that new investments in the private sector will top NT$860 billion (US$25.29 billion) for 2004, up NT$140 billion over that posted last year.

Although the task is challenging, such investments have already reached NT$466 billion in the first four months of this year, or 53.8 percent of the goal for the year, Ho said.

According to a survey conducted by the Ministry of Economic Affairs earlier this year of the country's manufacturing companies to gauge the economic prospects in Q1, 73.24 percent said they will renew investments in their operations this year.

Meanwhile, the Bureau of Foreign Trade (BOFT) under the Ministry of Economic Affairs has found that export orders received by Taiwan companies with business operations in China totaled US$81.5 billion for the first five months of this year.

BOFT officials predicted that Taiwan's foreign trade will record double-digit growth this year, with exports and imports exceeding US$150 billion and US$140 billion, respectively, both hitting all-time highs.

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