Government officials yesterday dismissed an IMF forecast that Taiwan’s GDP would contract by 4 percent this year, saying that the nation’s economy would continue to grow by 1.3 to 1.8 percent.
Directorate-General of Budget, Accounting and Statistics (DGBAS) Minister Chu Tzer-ming (朱澤民) made the assertion one day after the IMF released its World Economic Outlook report, which forecast that Taiwan’s GDP would decline amid a global recession.
“There is no need to take the [IMF] forecast seriously, as the international research body has failed to factor in the government’s NT$1.05 trillion [US$34.96 billion] program to mitigate the effects of the [COVID-19] pandemic,” Chu told reporters.
Photo: Tu Chien-jung, Taipei Times
The IMF also does not have the latest figures on Taiwan’s economic performance, as the DGBAS is to disclose first-quarter figures on April 30, he said.
The economy would remain in expansion mode this year, with growth of 1.3 to 1.8 percent, nearly 50 percent less than the agency’s prediction in February of 2.37 percent, he added.
The landscape has deteriorated significantly following the spread of the novel coronavirus across Europe and the US, leading governments worldwide to introduce travel restrictions and shut down non-essential businesses, Chu said.
Taiwan is susceptible to reduced global trade flows, but has been resilient thanks to a low number of infections, diminished dependence on Chinese tourists and the government’s quick response, he said.
The National Development Council said the IMF forecast reflected a lack of understanding of the nation’s economic situation.
The impact of the pandemic on the Taiwanese economy is much more controllable than in other Asian countries, because Taiwan has managed to minimize infections without invoking draconian isolation measures, the council said.
Manufacturing companies in Taiwan have maintained normal operations and a considerable number have reported order transfers from peers trapped by lockdowns elsewhere, it said.
Excluding special loans, relief and stimulus measures are to total NT$350 billion this year, accounting for 1.8 percent of GDP, that would help keep the economy growing and outperforming major trade rivals, as well as the regional and global average, the council said, adding that it would make sure budgets for public works are executed effectively.
Major economic data lent support to the government’s argument.
Exports in the first quarter expanded 3.7 percent, while imports increased 3.5 percent, faster than official projections of 2.19 percent and 1.85 percent respectively.
The IMF forecast that the world economy would contract by 3 percent this year, induced in part by concerted government efforts to combat the pandemic, before rebounding by 5.8 percent next year.
This story has been corrected since it was first published, which incorrectly stated in the fourth paragraph from the bottom that "Special loans as well as relief and stimulus measures are to total NT$350 billion this year." The online version of this story has been corrected into that "Excluding special loans, relief and stimulus measures are to total NT$350 billion this year."
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