Premier Liu Chao-shiuan (劉兆玄) said the government would lower its economic growth forecast for next year because of the slowing global economy.
Liu, who was speaking at a press briefing in Taipei yesterday, did not provide a new growth estimate.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) in August had forecast the economy would expand 5.08 percent next year.
REVISED
The global slowdown caused by the financial crisis “doesn’t look likely to recover in the short term” Liu said, adding that the government would announce the estimate at the appropriate time.
On Monday last week, Council for Economic Planning and Development Chairman Chen Tian-jy (陳添枝) told lawmakers it would be difficult for the government to achieve an economic growth rate of 5.08 percent next year and that the directorate-general would revise its forecast next month.
SLOW
Taiwan’s economy grew at the slowest pace in more than a year last quarter after slower demand for its electronics from China and the US cut export demand.
The expansion could moderate further after exports last month declined for the first time in 19 months.
Last week, Macquarie Research Equities cut Taiwan’s economic growth forecast to a contraction of 2 percent next year from its previous estimate of 4 percent growth, after Standard Chartered Bank (Taiwan) lowered its forecast to 3.1 percent growth next year from the 4.8 percent it predicted earlier.
Earlier this month, Deutsche Securities projected Taiwan’s GDP growth would drop to 1 percent next year from the 3.3 percent it forecast in June, while Citigroup cut its growth forecast for Taiwan to 3.6 percent next year from its previous estimate of 5.1 percent.
EXTENSION
The government will decide on Sunday whether to extend a 3.5 percent daily limit on stock declines, Liu said.
Taiwan on Oct. 13 halved the daily limit drop to 3.5 percent for a week to help stem a slide in local shares.
The measure was extended until tomorrow, but market observers said daily trading volume has suffered from this measure.
The benchmark TAIEX index, which has lost 43 percent this year, fell 1.6 percent yesterday to close at 4,862.59, its lowest in more than five years.
The decline was led by Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest custom chipmaker, which fell 3.4 percent to NT$42.60, its lowest since Oct. 1, 2004.
A visit to Taiwan by China’s chief negotiator for cross-strait relations, Chen Yunlin (陳雲林), will take place as planned next month, Liu said.
President Ma Ying-jeou (馬英九) has pledged to bolster ties with China to strengthen the economy.
Taiwan has eased limits on investment in China and allowed regular weekend charter flights to and from China since Ma took office in May.
ADDITIONAL REPORTING BY CRYSTAL HSU AND KEVIN CHEN
RSS