The Ministry of Economic Affairs (MOEA) said it “is working hard” to ensure GDP growth for this year is at least 5 percent amid global economic uncertainties, with the outcome largely depending on fourth-quarter business performance.
Minister of Economic Affairs Shih Yen-shiang (施顏祥) yesterday told the Legislature’s Economics Committee that companies have expressed vastly different views about the fourth quarter, with some expecting performance to improve and others predicting a slump.
There is “a lot of hard work to do” to ensure the 5 percent GDP growth target is realized, he said.
Private think tank Polaris Research Institute (寶華綜合經濟研究院) on Wednesday cut its forecast for Taiwan’s GDP growth to 4.73 percent, from the 5.2 percent it estimated in June.
The institute estimated 3.52 percent and 4.38 percent economic growth in the third and fourth quarters, compared with a 5.59 percent expansion in the first six months.
Asked by legislators whether Taiwan was on the verge of a recession, Shih said that Taiwan’s economy is export-driven and that as long as the economic momentum in China and the emerging markets of Southeast Asia continues, Taiwanese firms should be able to offset weaker demand from the US and the eurozone.
Asked if the private sector would start to ask employees to take unpaid leave to weather the weaker economy, Shih said that would be for companies to decide for themselves.
Council for Economic Planning and Development Minister Christina Liu (劉憶如) said the economic uncertainty would take a toll especially on the manufacturing sector, impacting export--dependent technology firms.
She told lawmakers on the committee that Taiwan’s fourth-quarter growth would slow from the third quarter, but that there was little chance of a recession as long as the nation’s GDP continued to expand.
However, Directorate-General of Budget, Accounting and Statistics (DGBAS) Minister Shih Su-mei (石素梅) said yesterday that it would be difficult to meet the agency’s GDP forecast of 4.81 percent made last month in the face of the current global economic climate.
The DGBAS had already cut its forecast to 4.81 percent from an earlier projection of 5.01 percent made in July.
“Given the recent economic climate there is a good chance that it will be necessary to revise down the annual forecast,” she told the legislative finance committee.
In addition, third-quarter economic momentum would be revised down, based on updated exports, imports and export orders data, she said.