Academia Sinica yesterday cut its growth forecast for Taiwan’s GDP to 0.93 percent this year from a previous estimate of 1.94 percent made in June, citing weaker-than-expected economic momentum in the fourth quarter.
The 0.93 percent growth estimate marked the lowest level for this year forecast by domestic economic institutes, and was also lower than the 1.13 percent growth estimated by the Directorate-General of Budget, Accounting and Statistics (DGBAS) last month.
“The momentum on exports continued to slow over the past two months, with private consumption also remaining weak,” Academia Sinica economic research fellow Ray Chou (周雨田) told a press conference.
The institute estimated GDP would grow 2.21 percent from a year earlier in the fourth quarter, lower than the 2.97 percent growth forecast by the DGBAS last month.
Meanwhile, Academia Sinica initiated its forecast for economic growth for next year at 3.05 percent, also lower than the 3.15 percent expansion previously estimated by the DGBAS.
The input sector may grow 4.33 percent next year, while the private consumption and the private investment was expected to show a 1.34 percent and 5.96 percent expansion respectively, the institute’s report showed.
Chou said uncertainties led by the eurozone’s debt crisis remained, which made the institute hold a conservative attitude about the economy showing a strong rebound next year.
Academia Sinica also said the global economy would struggle with long-term structural problems over the next few years and may not see growth momentum return to the levels seen before the global financial crisis in 2008.
“The economic slowdown this year reflected a long-term structural problem, instead of a typical and short-term business cycle,” Chou said.
The structural problems, led by the debt issue in the US and European countries, are unprecedented and may last several years, leading the institute to maintain its cautious view for the nation’s economy for the next two or three years, Chou said.
Therefore, Chou said it would be difficult for the global economy to return to the level before the global financial crisis in 2008, even through 2014 or 2015.
However, Chou said the central bank may retain its stable interest rate policy and keep policy rates unchanged at the board meeting this afternoon under the current mild inflation and modest economic recovery.
The institute predicted that next year’s GDP would grow between 1.35 percent and 4.83 percent, Chou said.
The nation’s economic momentum may grow stronger than expected under the rising investment led by government promotion policies, recovering exports and slowing inflationary pressure, as well as improving economics in China and the US, while a deterioration in these factors would drag down the institute’s current forecast, he added.