GDP forecast cut over half to 1.56%
Taiwan expected to perform much worse than competitors
The country’s 2015 economic growth forecast has been slashed by more than half to a mere 1.56 percent, the Directorate General of Budget, Accounting and Statistics ( DGBAS,
) announced yesterday, placing Taiwan last among the Four Asian Tigers.
The revised forecast was 1.72 percentage points lower than the previous 3.28 percent announced in May. The DGBAS cited negative export growth as the main reason for the slide.
Second- quarter gross domestic product ( GDP) growth was also cut to 0.52 percent. Previously in July, the DGBAS lowered its estimate for secondquarter growth to 0.64 percent. Claiming that it had not predicted weak export performance in the second quarter, the DGBAS decided to slash the original estimate of 3.05 percent to 0.64 percent, a 2.41 percent cut.
The revised GDP forecast numbers put Taiwan last among the Four Asian Tigers, losing by a wide margin to Singapore’s 2.8 percent, Hong Kong’s 2.4 percent and South Korea’s 2.3 percent. Taiwan is also the only Asian Tiger that tumbled below the 2 percent mark.
In terms of the year’s secondquarter numbers, Taiwan’s losses are more significant, at only 0.52 percent, compared with Hong Kong’s 2.8 percent, South Korea’s 2.2 percent and Singapore’s 1.8 percent.
Countries worldwide are slashing GDP estimates due to the global economic slowdown. Taiwan, as a “shallow- dish economy,” will see huge margins of fluctuations in times of severe export slumps, according to DGBAS.
A Let Down
Prior to the DGBAS announcement, finance experts were optimistic, suggesting that the office would only slash its estimate to approximately 2 percent.
In terms of domestic performance, the DGBAS said it remained optimistic, believing it is currently a cooler state for exports, but a warmer one for domestic markets. Other economic forecast centers were not so optimistic, saying domestic demand is not performing well this year.
Rick Lo ( ), director of Fubon Financial Holdings’ Economic Research Center, cited weak domestic demand due to struggling real estate and stock markets.
National Central University’s Department of Economics professor Chiou Jiunn- rong’s (
) forecast was more on point, stating that this year’s growth estimates could likely fail to meet 2 percent due to “systematic problems.” Coupled with weak Apple Inc. sales and an unstable mainland Chinese stock market, which implies a weak economic structure for China, Chiou believes the next half of the year will be even worse than originally assumed.
“Another cut to the economic growth forecast could be inevitable,” Chiou stated.
A container ship is docked at the southern port city of Kaohsiung, yesterday. Taiwan’s Directorate General of Budget, Accounting and Statistics announced that the export-oriented nation’s 2015 economic growth forecast has been drastically revised down to 1.56 percent.