Typhoon Morakot, which has wreaked havoc on the agriculture industry in southern Taiwan, is unlikely to disrupt the pace of economic recovery, economists said yesterday.
The typhoon halted stock and currency trading on Friday and is expected to send vegetable and fruit prices soaring in the coming days after washing away thousands of hectares of farm produce over the weekend.
Liang Kuo-yuan (梁國源), president of Polaris Research Institute (寶華綜合經濟研究院), a Taipei-based think tank, said the storm dealt a heavy blow to farmlands in southern and eastern Taiwan, the main source of the nation’s vegetables, fruit and rice.
“The storm is definitely a negative external shock that will cause huge property losses,” Liang said by telephone. “But it will not derail the economy from the course of recovery because the agriculture industry accounted for a small share of GDP.”
Agricultural production, including fishery and forestry, made up only 1.68 percent of GDP last year, while industrial production and the service industry constituted 25.15 percent and 73.17 percent respectively, the government’s data showed.
“Had science parks borne the brunt of the disaster, the economic picture would have taken a different outlook,” Liang said.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) predicted in May that the economy would contract 2.98 percent this quarter and return to 5.2 percent growth in the fourth quarter.
Many expect the agency to adjust the figures upward on Aug. 20 when it is to update GDP data, after the economy improved faster than expected.
Paradoxically, the typhoon could help advance the economy as both public and private sectors pump funds into fixing broken bridges, roadways and other infrastructure facilities.
“There will be additional public works plans to clean up the aftermath of the typhoon, driving up demand for building materials and creating more jobs,” Liang said.
Wu Chung-shu (吳中書), a researcher at Academia Sinica, agreed that the economy would continue on the road to recovery.
Wu said the government always sets aside crops to help stabilize food prices in the wake of storms, and consumers can also switch to imported farm produce with comparatively stable prices.
The consumer price index, which declined 2.33 percent last month to a 40-year low, may recover somewhat this month, Wu said.
“There is no need to worry about the price hikes in vegetables and fruits because they will soon return to normal levels,” Wu said by telephone.