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