DGBAS slashes growth forcast for 2001

STAFF WRITER , WITH AGENCIES

Sat, Feb 17, 2001 - Page 1

The Directorate General of Budget, Accounting and Statistics (DGBAS) has adjusted downward its forecast for 2001 GDP growth to 5.25 percent from its earlier 6.03 percent forecast, attributing the cut to a weakening global economy, declines in domestic and international stock markets and the sharp fall in manufacturing output.

Taiwan's economy slowed more than expected in the fourth quarter as electronics exports lost steam and political feuding sapped investor confidence.

The country's gross domestic product (GDP) grew by an annual 4.08 percent in the last quarter of 2000, slowing from the third quarter's 6.6 percent, according to data released yesterday DGBAS.

"The most important factors for this year's economic growth are still political issues, and political uncertainty will hurt Taiwan's economy," said Lin Chuan (林全), director of the nation's top budget and statistics agency, yesterday. "A rebound isn't expected this year," he added.

In an effort to boost the economy, the central bank has lowered interest rates to shore up the economy. It cut the benchmark rate a quarter-point to 4.375 percent on Feb. 1, citing slowing exports, lending and investment.

Additionally, the government proposes spending NT$111.5 billion (US$3.45 billion) on roads, bridges and other public works. The money would come in addition to existing budget allocations.

Lin said this year's economic growth forecast of 5.25 percent is dependent on the Legislative Yuan's approval of the additional public works spending.

If the money isn't spent, he said, growth could fall to as little as 4.75 percent to 4.85 percent.