Minister of Economic Affairs Shih Yen-shiang (施顏祥) said yesterday the ministry was considering additional stimulus measures to boost the economy after Academia Sinica on Wednesday lowered its projection for the country’s GDP growth rate to below 2 percent.
Academia Sinica’s GDP growth forecast of 1.94 percent for this year is the most pessimistic projection the institute has made in the past three years.
Shih said the decline in exports for four consecutive months and the Academia Sinica’s lowering of its economic growth forecast are serious signs for the economy.
He had said earlier the ministry’s goal was to help maintain the country’s GDP growth rate for this year above 3 percent.
Official data due today may show Taiwan’s export orders dropped 2.75 percent last month from a year earlier, a fourth monthly decline, according to the median estimate of economists in a Bloomberg survey.
To increase exports, Shih said the ministry would maintain existing projects, but would also consider new measures, such as deploying more promotional bases in emerging markets, and would also look into what had caused export competitiveness to decline.
As for promoting investment, the ministry is likely to achieve its goal of attracting NT$1.1 trillion (US$36.76 billion) in private investment this year, Shih said.
However, the nation’s industrial structure has long been overly focused on making intermediate products, an issue that must be addressed, he added.
Meanwhile, the Council for Economic Planning and Development said yesterday that the global economy was likely to improve by the end of this year because of a long-term trend of low oil prices, which would in turn benefit Taiwan’s export-reliant economy.
The council said the issue of consumer prices would therefore not be a major problem for Taiwan’s economy.
While crude oil prices have risen above US$100 a barrel in recent sessions,“Lower oil prices in the long term will reduce production costs for some companies,” a section chief of the council’s economic research department surnamed Chiu (邱) told a media briefing.
The Brent crude oil price stood at US$104 per barrel on Tuesday, up 14.27 percent over the past three weeks, amid Iran-EU tensions and a strike by gas and oil workers in Norway.
However, the council expects crude oil supplies to remain stable, as Iran-EU tensions have eased and Norway’s government intervened in the strike.
Given global economic sentiment, supply may exceed demand for the next few months and cause global oil prices to fall further over the period, the council said.
Against this backdrop, Goldman Sachs put forward a cautiously optimistic view of Taiwan’s stock market yesterday.
“In the short term [within the next three months], Taiwan’s stock market might not perform as well as the other markets in Asia,” Goldman Sachs analyst Kinger Lau (劉勁津) told a press briefing.
The TAIEX could bottom out next month or in September, Lau said, adding that Taiwan might experience a difficult third quarter before seeing a gradual increase in the last three months of the year.
The index is very likely to reach 8,500 points by June next year, he said, but warned that there is still a “relatively high” investment risk due to the low stock transaction level.