Sat, Apr 18, 2009 - Page 12 News List

Analysts say contraction may be worse than expected

By Joyce Huang  /  STAFF REPORTER

The nation’s first-quarter GDP may have contracted more than the government expected after exports ran more than US$2 billion short of the statistics bureau’s forecast, pundits said yesterday.

“[Nominal] exports in the first quarter totaled about US$40.5 billion, worse than the Directorate-General of Budget, Accounting and Statistics’ [DGBAS] estimate of US$43.6 billion,” DGBAS Director Tsai Hung-kun (蔡鴻坤) told a seminar yesterday.

Domestic consumption also appeared to remain weak last quarter after the nation’s credit card spending dropped by near 15 percent year-on-year in the first two months, Tsai said.

He refused to predict whether the bureau would revise downward its previous forecast of 6.51 percent GDP contraction for the first quarter, saying that “if there were a cut in average unit prices, no downward revision to the first quarter’s GDP may be needed, which is based on quantitative export volumes.”

The DGBAS will release the figure late next month.

Citigroup Inc Taiwan chief economist Cheng Cheng-mount (鄭貞茂) yesterday forecast that the GDP figure in the first quarter “would have contracted by between 8 percent and 10 percent.”

It’s almost certain to say that the local economy bottomed out in the final quarter of last year and the first quarter of this year, Cheng said. But the economy would continue to fluctuate in the coming quarters, staging a small “W-shaped” recovery because global economic fundamentals remained weak, he said.

Wu Chung-shu (吳中書), dean of the management college at National Dong Hwa University, said at the seminar that Taiwan’s economy would slowly recover in the second half of this year.

With the arrival of recent rush orders, the local stock market’s better-than-expected performance in recent months and the government’s stimulus measures to boost domestic consumption, Wu said GDP for the full year may turn out to be rosier than the DGBAS estimate of a 2.97 percent contraction.

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