Tue, Dec 03, 2013 - Page 1 News List

Ministers defend GDP forecasts, cite declining exports

By Camaron Kao and Helen Ku  /  Staff reporters

Council for Economic Planning and Development (CEPD) Minister Kuan Chung-ming (管中閔) said he will not flinch from accepting any responsibility that he should bear if GDP growth turns out to be lower than 2 percent for this year.

The Directorate-General of Budget, Accounting and Statistics (DGBAS) on Friday last week cut its GDP growth forecast to 1.74 percent, the third time it has lowered its forecast this year. Kuan had targeted 2 percent.

“The easiest way to be responsible is to resign,” Kuan said during a question-and-answer session at a meeting of the legislature’s Economics Committee. “I have my own judgement in terms of how to be responsible and when I should take the responsibility.”

The committee agreed on a resolution yesterday that Kuan’s year-end bonuses should be cut by half, although the other half of the bonuses would be given to him if GDP growth exceeds 3 percent, or the jobless rate falls to below 4 percent, for two consecutive quarters.

The move to cut Kuan’s bonuses follows a similar resolution by the committee on Nov. 21 to cut Minister of Economic Affairs Chang Chia-juch’s (張家祝) bonuses.

“As a man, I do not care about the bonuses,” Kuan said.

He said the nation’s economy can only be improved via long-term structural reforms, and the council will propose necessary projects within two months.

In related news, Directorate-General of Budget, Accounting and Statistics Minister Shih Su-mei (石素梅) told the legislature’s Finance Committee that the cut in GDP forecasts was due to weaker export performance.

Local PC brands and their supply chains are gradually losing global competitiveness as the growing popularity of mobile devices has led to a decrease in desktop and laptop shipments, while smartphone vendor HTC Corp (宏達電) is also struggling to regain its market share, Shih said.

Chinese Nationalist Party (KMT) Legislator Lu Shiow-yen (盧秀燕) disagreed and said the DGBAS was issuing inaccurate forecasts.

“The DGBAS should undertake a self-examination, and it should do it alongside the Ministry of Economic Affairs and the Council for Economic Planning and Development,” Lu said.

Shih told Lu that the DGBAS had cut its GDP growth estimate in accordance with the country’s export performance.

“Taiwan’s economy is small and therefore easily impacted by movements of the global market,” she added.

Vice Minister of Economic Affairs Bill Cho (卓士昭) told the Finance Committee that the total amount of private investment for the first 10 months of this year was NT$1.15 trillion (US$38.9 billion), which was about 85 percent of the government’s target of NT$1.2 trillion.

The ministry is speeding up free-trade agreement negotiations with other countries, he said.

“Free-trade agreements can help local firms stand on a level platform while exploring the global market,” Cho said, adding that South Korea’s free-trade pacts with the EU and the US helped it boost exports in recent years.

He urged legislators to approve the service trade agreement as soon as possible, warning that Taiwan risked losing its competitiveness if they did not.

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