The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday cut its forecast for GDP growth for this year to 3.04 percent, down from the 3.56 percent it projected in April, as a global economic slowdown, especially in China, affects exports.
However, academics who joined the discussion challenged the institution’s new forecast, saying it would be difficult — if not impossible — for the economy to expand 3 percent this year and the government should focus its resources on improving domestic demand.
Exports, which drove more than 70 percent of GDP growth in the first quarter, are predicted to grow 3.88 percent this year, sharply down from a prior estimate of 6.26 percent growth, the CIER report showed.
Photo: CNA
“The second half may put up a weaker performance compared with the first half owing to a higher base,” CIER researcher Peng Su-ling (彭素玲) told a media briefing.
GDP growth likely reached 3.11 percent in the first half of the year, but could decelerate to 2.97 percent for the rest of the year, with major economies proving to be weaker than expected, Peng said.
Slowing global growth is unfavorable to Taiwanese exports, which contracted 7.1 percent in the first half, the report said.
Taiwanese exports to major trading partners, notably China and Southeast Asian nations, are declining, while South Korea is gaining market share, the report said.
The trend suggests declining competitiveness among local exporters, Peng said.
To make things worse, China is reducing its dependence on imports of electronic components from Taiwan, as it builds up its own supply chain as part of its economic restructuring, Peng said.
On the currency front, the New Taiwan dollar has risen 2.67 percent versus the US dollar so far this year, while the yen and the won have retreated 1.89 percent and 1.5 percent respectively over the same period, Peng said.
A strong NT dollar is eroding exporters’ bottom lines, he said.
Government agencies are looking for ways to boost the nation’s exports and the economy as a whole, with some academics suggesting establishing a sovereign wealth fund to help finance social welfare spending and others calling for the establishment of a more investment-friendly environment.
Bills Finance Association (票券公會) chairman Hermann Wu (吳正慶) said that he and his peers doubt the economy can grow by 3 percent this year.
National Central University economics professor Chiou Jiunn-rong (邱俊榮) suggested that the government focus its efforts on strengthening domestic demand to support economic growth.
However, he added that the government gives too much importance to GDP figures.
“GDP growth may not improve or reflect the well-being of the public the way a wage increase does,” Chiou said.
GET TO SAFETY: Authorities were scrambling to evacuate nearly 700 people in Hualien County to prepare for overflow from a natural dam formed by a previous typhoon Typhoon Podul yesterday intensified and accelerated as it neared Taiwan, with the impact expected to be felt overnight, the Central Weather Administration (CWA) said, while the Directorate-General of Personnel Administration announced that schools and government offices in most areas of southern and eastern Taiwan would be closed today. The affected regions are Tainan, Kaohsiung and Chiayi City, and Yunlin, Chiayi, Pingtung, Hualien and Taitung counties, as well as the outlying Penghu County. As of 10pm last night, the storm was about 370km east-southeast of Taitung County, moving west-northwest at 27kph, CWA data showed. With a radius of 120km, Podul is carrying maximum sustained
President William Lai (賴清德) yesterday criticized the nuclear energy referendum scheduled for Saturday next week, saying that holding the plebiscite before the government can conduct safety evaluations is a denial of the public’s right to make informed decisions. Lai, who is also the chairman of the Democratic Progressive Party (DPP), made the comments at the party’s Central Standing Committee meeting at its headquarters in Taipei. ‘NO’ “I will go to the ballot box on Saturday next week to cast a ‘no’ vote, as we all should do,” he said as he called on the public to reject the proposition to reactivate the decommissioned
US President Donald Trump on Friday said that Chinese President Xi Jinping (習近平) told him China would not invade Taiwan while Trump is in office. Trump made the remarks in an interview with Fox News, ahead of talks with Russian President Vladimir Putin over Moscow’s invasion of Ukraine. “I will tell you, you know, you have a very similar thing with President Xi of China and Taiwan, but I don’t believe there’s any way it’s going to happen as long as I’m here. We’ll see,” Trump said during an interview on Fox News’ Special Report. “He told me: ‘I will never do
EXCEPTIONS: Some people could be allowed to reclaim citizenship for humanitarian reasons or because of their contributions to the nation, the interior ministry said Taiwan would soon unveil new rules banning Taiwanese residents of China from reclaiming their citizenship if they participated in Beijing’s propaganda activities, the Ministry of the Interior said on Monday. The measures were drafted following President William Lai’s (賴清德) March 13 directive that the government counter China’s espionage and influence campaigns aimed at undermining Taiwan’s sovereignty, the ministry said in a preview of the rules. The changes would affect Taiwanese who lost their citizenship after becoming permanent residents of China or obtaining passports issued by China, it said. Under the measures, former Taiwanese nationals living in China who had made statements denying the
RSS