GDP forecast cut over half to 1.56%

Tai­wan ex­pected to per­form much worse than com­peti­tors

The China Post - - FRONT PAGE - BY STEPHANIE CHAO

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.

CNA

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.

AP

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