Council for Economic Planning and Development (CEPD) Chairman Chen Tian-jy (陳添枝) said yesterday it would be difficult for the nation to achieve an economic growth rate of 5.08 percent next year and the statistics agency would revise its forecast next month.
Chen made the comment at a meeting of the legislature’s Economics Committee, which is reviewing the central government’s fiscal plan for next year.
“I’m afraid the government cannot accomplish the goal of raising GDP growth [to 5.08 percent] next year,” Chen said when asked by opposition lawmakers to comment on the economy.
Chen said the Directorate General of Budget, Accounting and Statistics, due to update its economic forecasts next month, would make the necessary adjustments caused by the ongoing financial credit crisis battering world markets.
Chen compared the credit crunch to a strong typhoon whose eye is sweeping across the globe and Taiwan will not be spared from its impact.
The top economic adviser predicted the storm would be over by the end of the year, but shied away from speculating on its aftermath.
“It’s hard to estimate the damage of the credit crisis,” Chen said, adding that stabilizing domestic financial markets now took precedence over the pursuit of economic growth.
To that end, Chen said, the government decided on Sunday to halve the daily limit of decline allowed on the local bourse for a week.
Chen said the measure may be extended, if necessary, but he voiced reservations on the idea of turning it into a long-term policy on the grounds that the practice would increase liquidity pressures.
He dismissed media reports that the government mulled using national development funds to bail out private lenders, saying the practice is needless in light of the state of the local banking system.
Chen said he had yet to reach a conclusion on the proposed establishment of a sovereignty wealth fund, but added that such a fund should not draw its funding from the nation’s foreign exchange reserves.
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