Sat, Jul 30, 2011 - Page 12 News List

DGBAS tweaks GDP forecast down slightly to 5.01%

UNCERTAINTIES:The statistics agency said tightening measures in emerging markets, as well as US and EU debt woes, could affect demand for Taiwanese electronics goods

By Amy Su  /  Staff Reporter

The Directorate-General of Accounting, Budget and Statistics (DGBAS) yesterday adjusted its full-year economic growth forecast slightly downward to 5.01 percent, from the 5.06 percent it estimated in May, saying that a lackluster global economic recovery could slow the nation’s exports in the second half of the year.

The nation’s GDP expanded 4.88 percent last quarter, outpacing the DGBAS’ estimate of 4.64 percent growth, according to statistics released by the agency yesterday.

The DGBAS attributed the latest GDP downgrade to rising global uncertainties — including tightening measures in emerging markets, as well as the US and eurozone debt crises — which drove Global Insight Inc, an independent economic and financial services firm, to revise down its forecast for global economic expansion to 3.3 percent, from the 3.5 percent it estimated in May.

“These uncertainties may have a negative influence on the momentum of Taiwanese exports and fixed investments in the second half as demand for Taiwanese-made electronics slows,” a DGBAS section chief who only gave her last name, Mei (梅), said by telephone.

FIXED INVESTMENTS

While forecasting 15.89 percent growth in exports this year, the DGBAS said fixed investments would drop 4.11 percent.

As for private consumption, the DGBAS expects 3.92 growth this year on the back of an improving unemployment rate and higher average salaries.

Compared with the government’s concern about global uncertainties, Tony Phoo (符銘財), a Taipei-based economist at Standard Chartered Bank, maintained his positive view on Taiwan’s economy in the second half of the year. Phoo forecast a rebound in overseas orders for Taiwan’s tech products, as power disruptions in Japan fade.

On the inflation front, the agency expects the consumer price index (CPI) to rise 1.89 percent this year, 0.21 percentage points lower than the 2.1 percent growth forecast it made in May, given better-than-expected weather conditions so far.

TYPHOONS

“Typhoons usually hit Taiwan around the third quarter, boosting vegetable and fruit prices and increasing inflationary pressure. However, the situation has so far been good this year,” Mei said.

If steady weather conditions last the whole quarter, Mei said the DGBAS might further revise downward its inflation estimate.

The DGBAS’ revised GDP estimate places it at the lower end of economists’ forecasts. Earlier this month, Polaris Research Institute (寶華綜合經濟研究院) said it expected GDP growth to rise 5.2 percent this year, while Chung-Hua Institution for Economic Research (中華經濟研究院) and Academia Sinica forecast 5.02 and 5.52 percent growth respectively.

The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) still has the highest forecast at 5.7 percent, while the Taiwan Research Institute (台灣綜合研究院) has the lowest at 4.95 percent.

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