The government cut its economic growth forecast for this year after sluggish exports caused the economy to expand in the fourth quarter at its slowest pace since the SARS outbreak of 2003, the statistics bureau said yesterday.
Gross domestic product rose 3.3 percent from a year earlier after climbing 5.3 percent in the third quarter, the statistics bureau said in a statement in Taipei.
"Poor exports dragged down Taiwan's economic growth last quarter," Grace Ng (
Overseas sales are flagging as global electronics demand slumps and industrial expansion is reined in in China, Taiwan's biggest export market. That's prompting companies such as AU Optronics Corp (
The government lowered this year's growth forecast for private investment to 8.9 percent from 9.3 percent and that for exports to 6.7 percent from 7.4 percent. Minister of Economic Affairs Ho Mei-yueh (何美玥) said Dec. 29 the nation's economic growth target for this year could be achieved provided growth in private investment remained strong.
Taiwan's exports, which account for about half of the country's economy, in December rose 6.2 percent, their smallest increase in 17 months. Export growth slowed to 12 percent in the fourth quarter from 22 percent in the previous three months, official figures show. Gain may slow further, according to economists including Vickie Hsieh, chief economist at President Securities Corp (
"The rising Taiwan dollar has started weakening overseas demand in the fourth quarter, slowing the island's exports and produced a trade deficit in December," Hsieh said. "The situation is worsening as the Taiwan dollar has appreciated more since that time." The Taiwan dollar has strengthened about 9 percent against the US dollar in the past six months and yesterday reached a four-year high of NT$31.175 per US dollar.
The local unit is likely to appreciate to NT$30.50 per dollar by the middle of this year, according to Ken Su, an economist at KGI Securities Co (
Shipments of computer chips and other electronic parts, which make up the biggest share of the country's exports, rose 7.6 percent to US$3.4 billion in December after 16 percent growth in November. Global chip sales fell 0.8 percent in the fourth quarter from the third and are expected to drop 4 to 6 percent this quarter, the Semiconductor Industry Association said.
Still, the statistics bureau said it expects economic growth to accelerate to 4 percent this quarter and raised this year's growth forecast for consumer spending to 3 percent from 2.6 percent. The Chinese government's success in cooling investment without damping economic growth bodes well for Taiwan, said Liu Yi-cheng (劉一震).
"China's economic growth will stay on the fast track, even after the government adopted measures to slow it," Liu, president of Yulon Nissan Motor Co (裕隆日產), which distributes Nissan Motor Co's cars in Taiwan, said after a Feb. 21 press briefing.
"Taiwan has a good chance to sustain its economic expansion by tapping China's growth." China's biggest bilateral trade deficit last year was with Taiwan and the Chinese economy, Asia's biggest after Japan, expanded 9.5 percent last year.
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