The outlook for this year’s economy remains bullish as the Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday raised its estimate for this year’s GDP growth to 4.72 percent from its November forecast of 4.39 percent.
The agency also raised the GDP growth estimate for the fourth quarter of last year to 9.22 percent, up 2.33 percentage points from November’s forecast of 6.89 percent.
The revised figure snapped five consecutive quarters of contraction and was the highest since the third quarter of 2004.
Last year, the economy contracted 0.98 percent in the third quarter, shrank 6.85 percent in the second quarter and declined 9.06 percent in the first, the DGBAS said.
“I do expect there will be an upgrade as Taiwan’s economic condition is improving because of a strong base effect. But I do not expect the revision to be so significant,” Liang Kuo-yuan (梁國源), president of Taipei-based Polaris Research Institute (寶華綜合經濟研究院), said by telephone.
“The upbeat forecast reflects the [DGBAS’] optimism about the global economy and the low probability for a double-dip recession,” Liang said.
A rebound in private consumption and local technology companies’ ability to capture new trends in electronic devices could help Taiwan reach that “high” goal, he said.
DGBAS statistics division director Tsai Hung-kun (蔡鴻坤) attributed the upward adjustment mainly to better-than-expected performance for exports of goods and services in the fourth quarter.
Revenue from triangular trade — orders which were taken in Taiwan but the goods manufactured offshore, mainly in China — totaled US$4.5 billion in the fourth quarter, up US$1.9 billion from US$2.6 billion in the same period of 2008, Tsai told a press conference.
“Exports have pulled the island out of its deep recession and trade with regional trading partners has helped the economy recover in particular,” Tine Olsen, a Sydney-based economist at Moody’s Economy.com said in an e-mailed statement.
Apart from offshore trade, inbound tourism also helped contribute to growth in exports of services in the fourth quarter, with the number of foreign tourists increasing 22.24 percent from a year earlier.
“The number of Chinese tourists visiting Taiwan hit 3,090 per day [in the fourth quarter], which was nearly three times more than the 1,090 in the same period in 2008,” Tsai said.
For the full year, GDP growth dropped 1.87 percent last year, the largest contraction on record, government data showed. In November, the DGBAS forecast the economy would contract by 2.53 percent.
The consumer price index (CPI) is expected to rise 1.27 percent this year, compared with a 0.87 contraction last year, while the wholesale price index (WPI) will likely grow 4.78 percent, the DGBAS said.
Asked whether this was likely to cause inflationary pressure, Tsai said that the increase would be “mild,” adding that gasoline prices would likely rise the most and that prices of electronic products would continue to decline.
DGBAS chief Shih Su-mei (石素梅) said that electronic books, LED TVs, touch-screen devices and products using cloud-computing technologies were expected to bring considerable business opportunities this year and help maintain export growth momentum.
“Custom cleared exports will likely grow 20.91 percent this year from a year ago and imports are expected to rise 25.67 percent,” Shih said.
With the outlook for the economy turning bullish and semiconductor companies relaunching their investment projects, private investment growth is expected to hit a six-year high of 14.81 percent this year, she said.
ADDITIONAL REPORTING BY LISA WANG
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