The nation’s GDP is likely to be higher than the Directorate-General of Budget, Accounting and Statistics’ (DGBAS) forecast of 3.5 percent as international crude oil prices continue to fall, the National Development Council said yesterday.
“As the DGBAS’s GDP forecast was based on the oil price of US$82 per barrel last year, it is possible that it will raise its forecast, because the oil price has already dropped below US$50 per barrel,” council Deputy Minister Kao Shien-quey (高仙桂) told a news conference.
However, it is hard to tell what the increase will be, because global oil prices make up only one of many factors affecting a nation’s GDP growth, Kao said.
Citing international research, Kao said global oil prices would not rebound significantly in the first half of this year.
“Given that OPEC recently said that it would not reduce its production in a short period of time, it is expected that international oil prices will remain weak,” Kao said.
The changes in oil prices this year would depend on the US’ adjustment of its shale oil production if OPEC maintains its output, Kao said.
Based on the commission’s industry input and output data, Kao said that if Brent crude oil falls from US$100 per barrel to US$70 per barrel, the nation’s GDP might rise by 0.38 percentage points and the consumer price index (CPI) might drop by 1.08 percentage points.
If the price of Brent oil falls below US$50 per barrel, the nation’s GDP could rise by 0.63 percentage points and the CPI could drop by 1.72 percentage points, she said.
Looking ahead, Kao said that the US economy, the Greek political crisis and further monetary easing in Japan would be factors affecting the global economy this year.
“We cannot underestimate those countries’ potential impacts on Taiwan’s economy,” she added.
However, cheaper global crude oil prices might also be an obstacle to the nation’s development in renewable energy sources, Kao said.
“Taiwan needs to develop green energy and cannot rely heavily on crude oil,” she said.
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