The National Development Council (NDC) yesterday set its annual GDP growth target for next year between 2.1 percent and 2.7 percent, indicating that the nation’s economy is improving after this year’s weakness.
Taiwan’s economy is expected to grow at an annual rate of 1.06 percent this year, the Directorate-General of Budget, Accounting and Statistics (DGBAS) predicted.
The upper limit of the GDP growth forecast would be achievable if downside risks arising from uncertainties over the international economy are minimal and if government stimulus policies have the intended effect, NDC director-general of overall planning Connie Chang (張惠娟) said.
The target for next year is based on the GDP growth forecast of 2.32 percent made by the DGBAS last month and factors in the government’s plan to actively enact policies in reaction to sweeping factors affecting the international economy.
CYCLES AND STRUCTURES
Lingering cyclical and structural factors contributing to uncertainties include slowing economic growth momentum in China and the challenges imposed by the rise of the so-called Chinese “red supply chain” to the national technology sector.
RATE HIKE
Other factors include the implementation of the US Federal Reserve’s long-awaited interest rate hike. Central banks in Europe and Japan have announced their intent to continue quantitative easing measures and discussed how the divergence in monetary policy is likely to affect foreign exchange, stocks and bonds markets, and whether the change would cause a spike in default risks across emerging markets.
The council also said that falling agriculture and commodity prices and the rise in terrorist attacks could continue to rock sentiment among businesses and consumers.
In response, the government is to continue deregulation efforts and measures aimed at expanding investments, developing human resources and hastening industry transitions as the nation’s private sector must reposition itself in the international value chain.
INFLATION LEVELS
The council also aims to maintain the inflation level at under 2 percent next year and maintain the jobless rate at between 3.7 percent and 3.9 percent, it said.
The jobless rate came in at 3.76 percent in the first 10 months of this year, while the inflation rate was gauged at minus-0.31 percent this year and is forecast to hit 0.84 percent next year, the DGBAS said.
The council said that it began using a target range for GDP growth, as opposed to a specific figure to better reflect rapidly changing international downside risks.
Similarly, as government policies are often aimed at achieving medium to long-term objectives, their outcomes cannot be easily determined on an annual basis, the council said.
The council said that its latest forecast for next year would mark the end of annual projections and that beginning next year it would be publishing only four-year plans.
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