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Economist expects negative growth in Q3 for first time in 6 years

Economist expects negative growth in Q3 for first time in 6 years

Taipei, Oct. 19 (CNA) Australia and New Zealand Banking Group Limited (ANZ) has predicted that Taiwan will see its first quarter of negative growth since the third quarter of 2009 when the government releases third quarter gross domestic product (GDP) data later this month. ANZ senior economist Raymond Yeung (???) estimated Monday that Taiwan's GDP growth will contract 0.27 percent in Q3 year-on-year, and that the annual economic growth for the year will rise by only a moderate 1.30 percent, lower than the government's estimate of 1.56 percent. Yeung attributed the predicted weakness to a year-on-year drop of 13.8 percent in exports for Q3 and a slump of 14.6 percent for September, saying that the recession in trade and investment has been larger than previously anticipated. If exports do not stage a big rebound in October, it is possible that the Directorate General of Budget, Accounting and Statistics will further adjust downward its GDP forecast for 2015, the analyst said. Speaking of a September move by the central bank to cut its key interest rates by 0.125 percentage points as part of efforts to help pump up economic growth, Yeung said it shows that Taiwan has officially entered a loose currency circle and that its currency policy will become unhooked from the U.S. Federal Reserve System. Describing the discount rate as a market sentiment management tool, Yeung said that for the central bank, every 0.125-percentage-point adjustment is a valuable tool that will only be used when the economic conditions and economic sentiment show obvious signs of deterioration. (By Tsai Yi-chu and Elizabeth Hsu)


Updated : 2021-09-17 08:50 GMT+08:00