Fri, Aug 21, 2009 page12

• Taiwan’s economy shrank 7.4% in Q2

  BOTTOMED OUT If losses caused by Typhoon Morakot are not factored into the forecasts, however, the economy could decline by 3.8 percent, the DGBAS said

  • By Crystal Hsu / STAFF REPORTER
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  The nation’s economy shrank 7.54 percent in the second quarter from a year ago, after a revised 10.13 percent decline in the first quarter, as the global economy stabilized and eased a freefall in exports, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

  On an annualized quarter-to-quarter basis, the economy grew 20.69 percent in the second quarter from the previous three months, the statistics agency said.

  “The annualized quarter-to-­quarter data showed the economy bottoming out in the first quarter, turning positive in the second quarter and will continue to improve for the rest of the year,” Tsai Hung-kun (蔡鴻坤), a director at the DGBAS statistics division, told a press conference.

  With improving economic fundamentals, the statistic agency narrowed the predicted pace of economic contraction to 4.04 percent for this year — still the worst in the nation’s history — from the 4.25 percent contraction it forecast in May.

  If losses caused by Typhoon Morakot were not factored in, however, the economy could decline by 3.8 percent this year from last year, DGBAS Director-General Shih Su-mei (石素梅) said.

  Altogether, the agency put ­Morakot-related damage at between NT$19 billion (US$577 million) and NT$23 billion and expected it to dent GDP by between 0.6 and 0.7 percentage points this quarter.

  Morakot, which struck Taiwan on Aug. 8, is estimated to have caused as much as NT$18 million in agricultural damage and NT$4 billion in service output losses for the July-to-September period, while denting inbound tourism spending by as much as NT$4 billion, DGBAS said.

  However, Shih said relief and reconstruction funds would boost GDP by 0.29 percentage points this year, provided the government carried out the spending program promptly. DGBAS said the economy could decline 3.52 percent in the third quarter from a year earlier, before seeing a rise of 5.49 percent in the fourth quarter. In May, the statistics agency said the economy would contract by 2.98 percent in the third quarter and increase 5.2 percent in the final quarter.

  Exports, the main driver of Taiwan’s economic growth, shrank 31.98 percent between April and June from the same period last year, DGBAS data showed.

  The slump in exports is forecast to narrow to a decline of 21.31 percent this quarter. But exports are likely to see a rise of 13.1 percent year-on-year in the final three months, DGBAS data showed.

  Exports would expand 15 percent next year and help spur a modest GDP growth of 3.92 percent next year, Tsai said.

  The projected 3.92 percent year-on-year growth next year would make Taiwan a stronger performer, compared with Hong Kong, Singapore and South Korea, whose GDP is estimated at between 1.2 percent and 3.7 percent next year.
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