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Taiwan cuts 2019 GDP growth forecast to 2.27%

Taipei 101

Taipei 101 (CNA photo)

The government's statistics bureau on Wednesday lowered its forecast for Taiwan's 2019 gross domestic product (GDP) growth to 2.27 percent, citing growing uncertainties over global economic growth.

The Directorate General of Budget, Accounting and Statistics (DGBAS) said the 0.14 percentage point cut in its 2019 forecast from its estimate last November reflected weaker global and domestic demand.

Chu Tzer-ming (朱澤民), head of the DGBAS, said that with a slowdown in global expansion, major international institutions have revised their outlook for the world economy.

The London-based information company IHS Markit Ltd has forecast that the global economy will grow by 2.9 percent this year, the slowest in three years, Chu said.

Due to such factors, Taiwan's exports in 2019 will grow by no more than 0.19 percent year-on-year, the DGBAS forecast, revising its forecast from the 1.96 percent it estimated last November.

It said its new estimate was based on weakening global demand for smartphones, which has hit domestic industries in the supply chain, and the fact that semiconductor companies are adjusting their inventories.

In addition, the DGBAS forecast real private investment growth in Taiwan at 3.62 percent, 0.5 percentage points lower than its projection last December.

Looking ahead to Taiwan's economic prospects, the DGBAS pointed to four major uncertainties, namely developments in the U.S.-China trade war, the European and American central banks' normalization of their monetary policies, fluctuations in the prices of crude oil, raw materials and the international bond market, and the impact of the geopolitical situation on the global economy.

Chu said that while the world is anxiously watching the U.S.-China trade disputes, Taiwan's economic growth rate will drop 0.03 or 0.04 percentage points, which is "not as scary as imagined."

Last November, the DGBAS forecast that Taiwan's 2019 GDP would expand by 2.41 percent. The growth momentum in the second half of the year will be stronger than in the first half of the year, the agency said at the time.

The Chung-Hua Institution for Economic Research, one of the leading think tanks in Taiwan, has left its forecast for Taiwan's 2019 GDP at 2.18 percent, while the Taiwan Institute of Economic Research is projecting 2.12 percent growth.

Updated : 2021-08-04 19:19 GMT+08:00