DGBAS likely to cut 2015 Tai­wan GDP growth to around 2.68 per­cent

The China Post - - TAIWAN BUSINESS -

The Di­rec­torate Gen­eral of Bud­get, Ac­count­ing and Sta­tis­tics ( DGBAS) is likely to cut Tai­wan’s gross do­mes­tic prod­uct (GDP) growth for 2015 to around 2.68 per­cent af­ter the coun­try re­ported dis­ap­point­ing sec­ond-quar­ter GDP data, sources said Thurs­day.

The ex­pected down­grade will re­flect weak­en­ing global de­mand at a time when sev­eral ma­jor economies, in­clud­ing China, show signs of a slow­down, the sources said.

At the end of July, the DGBAS re­ported that the GDP for the sec­ond quar­ter grew only 0.64 per­cent — lag­ging far be­hind its pre­vi­ous es­ti­mate of 3.05 per­cent growth — cit­ing lower-than-ex­pected ex­port growth.

Af­ter the poor sec­ond-quar­ter GDP data was re­leased, fears have been mount­ing that the econ­omy is un­likely to grow at a pace of 3 per­cent for 2015 as the DGBAS had pre­vi­ously forecast.

The poor sec­ond-quar­ter GDP data re­sulted from a weak eco­nomic per­for­mance in the three-month pe­riod, in­clud­ing a 13.9-per­cent year-on-year de­cline in ex­ports in June. In July, the coun­try’s ex­ports con­tin­ued to fall 11.9 per­cent yearon-year, mak­ing the month the sixth con­sec­u­tive one to register a drop in ex­ports.

Un­der such un­fa­vor­able cir­cum­stances, the DGBAS could cut its forecast from an es­ti­mate of a 3.28 per­cent in­crease the agency made in May. The agency is sched­uled to up­date its GDP growth forecast Fri­day.

Dur­ing the April-June pe­riod, mer­chan­dise and ser­vice ex­ports fell 1.30 per­cent in the sec­ond quar­ter from a year ear­lier, com­pared with an ear­lier forecast of a 3.27 per­cent in­crease.

In the quar­ter, im­ports, which have been af­fected by fall­ing raw ma­te­rial prices and slug­gish lo­cal de­mand, rose 1.93 per­cent, lag­ging be­hind the pre­vi­ous forecast of 2.41 per­cent.

How­ever, pri­vate con­sump­tion was one of the few bright spots, ris­ing 2.81 per­cent in the sec­ond quar­ter from a year ear­lier to beat an ear­lier es­ti­mate of a 2.75 per­cent rise.

Another sil­ver lin­ing was cap­i­tal for­ma­tion for the quar­ter, which rose 5.42 per­cent from a year ear­lier, com­pared with an ear­lier es­ti­mate of a 3.18 per­cent in­crease.

The gov­ern­ment has re­peat­edly said that while the per­for­mance in ex­ter­nal trade missed the gov­ern­ment’s ear­lier ex­pec­ta­tions, the sec­ond-quar­ter GDP data shows that do­mes­tic de­mand re­mained sound.

The sources said that since the pace of a global eco­nomic re­cov­ery has been slow­ing to keep in­ter­na­tional crude prices low, the DGBAS is likely to cut its forecast for con­sumer price in­dex growth from an ear­lier 0.13 per­cent rise.

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