GDP growth target set at 3.2% for 2014

EXPANSION::WTO talks, which will benefit countries with few bilateral agreements like Taiwan, and the new free economic pilot zones will help growth, the CEPD said

By Camaron Kao  /  Staff reporter

Tue, Dec 17, 2013 - Page 13

The Council for Economic Planning and Development (CEPD) yesterday set the target for GDP growth next year at 3.2 percent as the global economy shows signs of improvement.

The council’s 3.2 percent growth rate, which translates into US$21,520 per capita GDP, is 0.61 percent higher than the 2.59 percent forecast made by the Directorate-General of Budget, Accounting and Statistics (DGBAS) last month.

“The forecast of the DGBAS was relatively conservative compared with other research institutes,” Cheryl Tseng (曾雪如), director general of the council’s overall planning department, told reporters yesterday.

According to Tseng, the DGBAS’ forecast was lower than yesterday’s 3.1 percent forecast by Global Insight Inc, an independent economic and financial services firm, and the 3.8 percent forecast by the IMF in October.

There was more positive news, Tseng said.

She said WTO trade talks made some progress on costume clearance, which will benefit countries with fewer bilateral free-trade agreements like Taiwan, adding that free-trade agreements between Taiwan and Singapore and Taiwan and New Zealand will also increase the nation’s exports.

Helping to support investment is the council’s angel fund, initiated to help start-up companies, and the free economic pilot zones, which are set to be launched next year, she added.

“We tried to set a target that is both a challenge, but also achievable,” Tseng said.

Last year, the council set a GDP growth target of 3.8 percent. However, the latest forecast made by the DGBAS predicts the economy is likely to grow just 1.74 percent this year.

The government also aims to reduce the jobless rate to below 4.1 percent and the inflation rate to less than 2 percent next year.

The DGBAS forecast that the consumer price index will rise by 1.21 percent next year.

Gordon Sun (孫明德), director of the macroeconomic forecasting center at the Taiwan Institute of Economic Research, said it is possible for the government to reach the target next year, but added that it should put more emphasis on private consumption.

“Private consumption accounts for around 60 percent of the nation’s annual GDP,” Sun said by telephone yesterday.

According to Sun, the government should try to use more direct ways to provide incentives for companies to raise salaries, instead of just trying to increase companies’ profit.

Even when companies register higher profit, they might not raise salaries, Sun said.