Annual GDP forecast lowered again: DGBAS
The China Post with the CNAThe Directorate-General of Budget, Accounting and Statistics (DGBAS) on Friday lowered its estimate for annual gross domestic product (GDP) growth to 2.31 percent, the second such adjustment this year.
August 17, 2013, 12:04 am TWN
DGBAS yesterday revised down its 2013 GDP growth forecast to 2.31 percent on-year from the previous estimate of 2.4 percent forecast in May. DGBAS also released preliminary data showing economic growth of 2.49 percent in the second quarter, exceeding expectations of 2.27-percent growth.
The government tips Taiwan's GDP to grow 2.47 percent and 2.61 percent on an annual basis in the third quarter and fourth quarter respectively, slower than its previous estimates of 2.86 percent and 2.98 percent.
Economists say the move is largely in line with expectations and the government is more pessimistic on second half economic outlook.
“Since the economic growth in the U.S. could undershoot expectations this year, Taiwan's GDP growth will likely fall to around 2 percent in the second half of the year,” says Ta Chong Bank economist Woods Chen.
Taishin Securities Investment Advisory economist Kevin Wang says China's economy is likely to recover more quickly in the second half; he tips Taiwan's second half GDP to grow around 3 percent and says 2013 GDP growth could reach above 2.5 percent.
Exports Hit Hard by China's Slowdown
Annual exports, which account for about two-thirds of Taiwan's GDP, are expected to grow 2.3 percent, down from the 2.82-percent growth previously estimated, while the imports-growth estimate was also revised downward, to 1.85 percent from 3.91 percent.
Taiwan ships most of its exports to China, the U.S. and Europe. Economists say Taiwan has been hit hard by China's slowdown, while the worsening European economy and an uncertain outlook in the U.S. are also weighing on growth.
Accelerating outbound corporate investments, particularly to China and Southeast Asia where production costs are relatively lower and domestic markets are much bigger than at home, have led to muted growth in capital investments, and thus domestic consumption, in Taiwan.
“Exports to emerging markets grew less than expected due to intensifying competition and localized supply chain in China. Private investments remain weak as only semiconductor companies would increase capital spending this year,” the Directorate General of Budget, Accounting and Statistics said in a statement.