The twin impacts of Typhoon Nari and the attacks on the US are expected to lop one fifth of a percentage point off Taiwan's gross domestic product (GDP) growth this year, a top economic planner said yesterday.
"The full year's economic growth rate will be lowered by 0.2 percentage point," Chen Po-chih (陳博志), chairman of the Cabinet's Council for Economic Planning and Development, told the legislature when asked to assess the impact of the typhoon, which killed 85 people and caused widespread flooding in Taipei, and the US attacks.
That would cut GDP by NT$19.4 billion (US$561 million).
The government has steadily cut its forecast for this year's GDP from an original 6.48 percent growth to the current 0.37 percent decline -- which would be the country's worst performance since it began keeping records in 1962 and its first full-year contraction.
Chen said the economy would expand in the fourth quarter but at a lower rate than the previous forecast of 2.38 percent. In addition, he predicts Taiwan's overall economic growth next year will be around 3.5 percent, lower than the previous forecast of 4 percent.
Chen explained that the government will have to readjust downward the economic growth prospects for the fourth quarter as a result of a spate of "accidents and unexpected events."
But he said it is still too early to speculate on exactly how much the economy will slide in the last quarter of the year.
Economists have warned that the attacks on the World Trade Center in New York and the Pentagon in Washington could sap already weak domestic consumption in the US -- Taiwan's largest export market.
Adding to its woes, Nari slammed into Taiwan this week, dumping record amounts of rain and causing the capital's worst-ever flooding.
Agricultural losses from the storm totalled NT$2.79 billion, the Council of Agriculture said, as floods inundated about 27,600 hectares of farmland.
The Taiwan Stock Exchange has said publicly listed companies reported a total of NT$1.44 billion in typhoon-related damage.
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