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CEPD sets 3.2-percent growth target for 2014

TAIPEI, Taiwan -- The Council for Economic Planning and Development (CEPD, 經建會) yesterday announced its goal of achieving 3.2-percent GDP growth in Taiwan next year.

The CEPD's forecast is 0.61 percent higher than the 2.59-percent prediction made by the Cabinet's Directorate-General of Budget, Accounting and Statistics (DGBAS) last month.

Cheryl Tseng (曾雪如), the council's director-general of planning, said that since the DGBAS released its 2.59-percent forecast for next year, many positive economic indicators have been released around the world, and that foreign banks were even more optimistic regarding next year's economy.

Nevertheless, CEPD maintains a “cautiously optimistic” attitude toward the economic growth rate next year, officials said.

The CEPD also announced US$21,520 GDP per capita, a 4.1-percent unemployment rate, and less than 2-percent inflation as other goals that it aims to achieve next year.

Optimism in Global Economy

Global Insight predicted a 3.3-percent economic growth rate in the world next year, while the International Monetary Fund predicted a 4.9-percent expansion in trade volume around the globe. Both figures are at least 2 percentage points higher than those registered this year.

As such, the CEPD predicted growth momentum in developed countries to surge, while emerging economies are expected to expand next year.

However, the U.S. Fed is expected to taper off quantitative easing in the near future, and with the eurozone's rather weak financial structure, the global economic growth rate might be adjusted downward in the future, the CEPD said.

The Road Ahead

In order to achieve the growth rate target, Taiwan must strengthen its exports, both products and services, as well as hastening the launch of free trade pilot zones to lure investments from both foreign and domestic businesses. In addition, Taiwan must actively pursue free trade agreements with its major trade partners, the CEPD said.

Tseng stressed that investment and exports are the most crucial factors that drive the local economy. The former issue will be addressed with the second-stage launch of the free trade pilot zones, while the second issue will be addressed with adjustments to Taiwan's export strategy.

The CEPD yesterday also announced its major economic policies for next year. The CEPD aims to make adjustments to Taiwan's exported product structure in an effort to diversify Taiwan's exports. The CEPD will also encourage innovation and entrepreneurship in the free trade pilot zones. In addition, the CEPD stressed that it would continue to carry out structural reforms in an effort to enhance employment and labor force's competitiveness.

Overly Rosy Estimation

The CEPD predicated last year that Taiwan would see 3.8-percent growth this year. The growth this year, however, is forecast by the DGBAS to be only 1.74 percent.

Therefore, not everyone is immediately persuaded by the CEPD's 3.2-percent GDP growth estimation in 2014.

Exports and private demand this year did not meet expectations, the CEPD said. The unemployment rate in 2013 was pegged at 4.18 percent, slightly higher than the targeted 4.1 percent. The inflation was pegged at 0.94 percent, which reached the target of less than 2 percent.

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