Tuesday's terrorist attacks on New York may exacerbate Taiwan's economic downturn as US demand for high-tech goods such as computers and mobile phones slumps further, economic planners said yesterday.
The attacks may shave another 0.2 percentage points to 0.5 percent off the GDP for next year, said Chen Po-chih (
"There will only be a short-term negative impact [on Taiwan's economy]," Frederic Chang (張平男), deputy director-general of the Government Information Office, quoted Chen as saying yesterday. "The economic recovery will arrive a quarter later than expected, depending on the US economic recovery."
The government earlier estimated that the economy would contract by 0.37 this year before recovering next spring. For next year, most analysts expect the economy to grow 4 percent.
A day before the attacks, Merrill Lynch predicted that the nation's economy would contract 2.3 percent this year -- with no sign of recovery until the first half of next year.
According to Chang, Chen said in a Cabinet report that a turnaround in Taiwan's economy could be delayed, with US consumer confidence expected to weaken and the likelihood of a US economic recovery in the fourth quarter appearing minimal.
The prospect of US military retaliation for the strikes on the World Trade Center and Pentagon may also aggravate risks confronting the world economy, Chen said.
The nation's GDP growth rate for next year is expected to come in at 3.84 percent, he said. The figure could be revised down to 3.78 percent if international oil prices rise by another 10 percent over a prolonged period of time.
If the US fallout proves even more severe, the figure could come in at 3.54 percent.
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