The Council for Economic Plan-ning and Development (CEPD) has set an economic growth target of 4.6 percent for next year, a top-ranking council official said after a meeting to approve the national development project.
Council Vice Chairman Yeh Ming-feng (葉明峰) said that per capita GDP next year was expected to reach US$16,886 and that the unemployment rate would be 3.9 percent.
With crude oil expected to average US$65 per barrel, inflation would not exceed 2 percent next year, he said.
And with the credit card debt crisis easing and the government's major investment projects in place, domestic demand is likely to expand next year, Yeh added.
domestic demand
Among the 4.6 percent economic growth, domestic demand would contribute 63.9 percent, while the trade surplus would contribute 36.1 percent, he said.
He said next year would mark the beginning of the first three-year stage of an economic project that would run until 2015, with major investments in a steel refinery plant and a petrochemical plant.
Yeh noted that judging from the predicted economic performance of the nation's two economic partners -- China and the US -- for next year, he felt cautiously optimistic about Taiwan's foreign trade.
He said China was expected to register an economic growth between 9 percent and 10 percent.
With such robust growth, China's neighbors would not take a dramatic turn for the worse, Yeh said.
Although a previous prediction for economic growth for the US was a slowdown to 2.4 percent next year from an estimated 3.3 percent this year, the IMF still predicts it will be 2.9 percent.
On domestic demand, Yeh said that due to the credit card debt crisis earlier this year, as well as the effect of two "ghost months" -- the seventh month of the Chinese calendar when business activity is usually sluggish, he said that private consumption has been poor, but the card debt crisis had eased in the fourth quarter.
He also said that while the political turmoil this year had put a damper on investment, a series of high-profile corruption scandals entering judicial proceedings and the halving of the number of legislators in the next legislative elections late next year will have a positive effect on Taiwan's democratic development.
faster growth in 2008
Meanwhile, Goldman Sachs said yesterday that it maintained its GDP growth forecast of 4.5 percent for Taiwan next year, above the market consensus of 4 percent, and expected the nation's economic growth to accelerate to 5.5 percent in 2008.
It expected a turnaround in the domestic demand cycle in the middle of next year, which would grow by 3.7 percent annually, up from 1.4 percent this year, followed by a gradual recovery at 5 percent into 2008, Goldman Sachs' economist Enoch Fung said in a report released yesterday entitled Taiwan: Brighter outlook for 2007 and 2008.
Fung said he expected an acceleration of global growth at 4.3 percent in 2008 -- an increase over the forecasted 4.1 percent for next year -- and an acceleration of US economic growth at 2.5 percent -- up from 2 percent -- for the same period.
The acceleration would lift Taiwan's export cycle, starting from the second half of next year, he said.
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