GDP growth to dip to 1.68% in ’08 and 1.24% in ’09: CIER

The CIER announced the revision at a seminar on the 2009 global economic outlook, which was presided over by CIER President Daigee Shaw.

Wang Lee-rong, director of CIER’s Center for Economic Forecasting, said the center has decided to sharply adjust downward its forecast for gross domestic product (GDP) growth in line with the global economic downturn.

The CIER predicted in October that economic growth could reach 3.82 percent this year, and 3.34 percent next year.

Wang said that if the global financial crisis continues to worsen, and economic growth for the United States, Japan and China also deteriorate, then “Taiwan’s economic growth could be negative 0.92 percent next year.”

Meanwhile, the CIER also predicted the jobless rate for next year at 4.35 to 4.75 percent, and anticipated a negative growth of 0.95 percent for consumer price index, indicating the arrival of the deflation era.

Among all the domestic think tanks, the CIER has made the most pessimistic economic forecast, while the Taiwan Institute of Economic Research has been the most optimistic, predicting an economic growth this year at 4.08 percent, and 4.11 percent for next year.

The Cabinet-level Directorate General of Budget, Accounting and Statistics also revised its forecast for 2008 and 2009 economic growth sharply downward to 1.87 percent and 2.12 percent, respectively.

CIER officials said the global financial crisis has had the biggest impact on the banking and insurance sectors, but that the plastics and chemical, steel, cement and shipping sectors have also been affected.

With the economic slowdown in Europe and the United States, the market for large size panels, computer memory and personal computers will shrink, the officials said.

In addition, due to rising unemployment and decreased consumption, the wholesale and retail, eatery and real estate sectors will also be affected, they said.

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