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Liu expects GDP growth in fourth quarter

Premier Liu Chao-shiuan (劉兆玄) yesterday said the country’s economic growth rate should turn positive in the fourth quarter this year if economic trends continued.

Liu made the remarks at a press conference on the eve of his one year anniversary as premier.

However, he said it was “unlikely that the economic growth rate for [the full] year will turn positive ... If the economic rebound continues after the third quarter, maybe we will have a smaller negative growth for the year ... but it’s difficult.”

“The original goal of negative growth of 2.97 percent this year was not an easy shot in the first place,” Liu said when asked whether he had altered his outlook for the economy in view of recent signs of economic recovery.

Liu said he expected positive economic growth in the fourth quarter and in the first quarter of next year if the fourth quarter went as expected.

As to whether the government would consider extending for another year a 100 percent state guarantee on all bank deposits, Liu said this was under deliberation by a team led by Vice Premier Paul Chiu (邱正雄).

“We will stop the full guarantee if the measure is deemed unnecessary and will not prolong the program just because we wanted to see it extended,” Liu said.

Liu said the guarantee was the policy he was most satisfied with over the past year as it had stabilized the financial market without costing the government a penny, while the US government had spent US$300 billion and the UK government £80 billion (US$124 billion) to help their economies.

Asked if the government’s plan to sign an economic cooperation framework agreement (ECFA) with China would be on the agenda for the fourth round of cross-strait talks scheduled for later this year, Liu said talks on the issue did not necessarily need to be held in the form of negotiations between Straits Exchange Foundation Chairman Chiang Pin-kung (江丙坤) and Association for Relations Across the Taiwan Strait Chairman Chen Yunlin (陳雲林).

“There are various channels between the two sides of the Strait, formal or informal ... It’s not important whether the ECFA is on the agenda for the fourth cross-strait talks,” Liu said.

Liu also said the government was talking with China on further lowering the minimum number of people per Chinese tourist group from five persons to three or two.

The minimum threshold was lowered from 10 to five people in January.
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