Moody's report forecasts 3.8% growth for 2013

An associate economist at Moody's, Katrina Ell, stated in her report titled “Taiwan Outlook: A Brighter Year Ahead” yesterday that the worst is over, and that Taiwan's export-oriented economy is poised to take advantage of improving global economic conditions.

Ell said that Taiwan's GDP growth for the year will be at a nominal 3.8 percent, up from the low of 1 percent last year, but concluded that the GDP growth rate will not reach 4 percent until 2014 due to the ongoing global slump.

The Ministry of Economic Affairs predicted industrial output growth of 5.85 percent last December.

Ell's findings are in-line with numerous forecasts previously released by government bodies and research institutions last December.

The Institute of Economics at Academia Sinica (中央研究院經濟研究所) forecast GDP growth of 2.25, 2.92, 3.17, and 3.79 percent for the first to fourth quarter of next year, representing overall growth of 3.05 percent.

The Directorate General of Budget, Accounting and Statistics (行政院主計處) has downgraded its growth prediction for 2013 from 3.67 to 3.09 percent.

The Chung-Hua Institute for Economic Research (中華經濟研究會) pegged 2013 GDP growth at 3.6 percent.

Ell's projection of 3.8 percent is identical with the Cabinet approved GDP target, with the Council for Economic Planning & Development (CEPD, 行政院經濟建設委員會) proposing a number of economic plans to reach the goal.

The CEPD also projected that GDP will grow at a yearly average rate of 4.5 percent annually until 2016.

Premier Sean Chen, who survived calls for his resignation and a no-confidence motion by 66 to 46 votes last September, stated that the government sincerely accepted criticism from all circles but urged the public to have confidence in Taiwan's economy.

He added that the IMF was rather optimistic about Taiwan's economic performance next year, predicting a 3.9-percent growth rate, among the highest in Asia.

To date there had not been a response from Chen on his pledge last September to produce "tangible" signs of economic recovery. In contrast there have been numerous opposition party-led demonstrations expressing discontent, with more to come from unions of state-owned enterprises.

On the private front, Cathay Financial Holding Co. (國泰金控) predicted 3.8-percent GDP growth this year, while Yuanta-Polaris Research Institute (元大寶來研究院) forecast 3.85 percent, according to a statement made by CEPD Minister Yiing Chii-ming (尹啟銘).

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