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Taiwan's economy to shrink by 6% in 2009: Morgan Stanley

Report also predicts Taiwan's exports to contract by 23 percent this year

Taiwan's economy to shrink by 6% in 2009: Morgan Stanley

Morgan Stanley Taiwan predicted yesterday that Taiwan will continue to be battered by the global economic slowdown in 2009, with the economy contracting by 6 percent and exports falling by 23 percent.
The gloomy forecast was the second in the last week by a multinational investment firm, after CLSA Asia-Pacific Markets predicted Feb. 4 that Taiwan's economy would contract by 11 percent because of a major slump in exports.
The forecasts contrast sharply with an estimate issued by Taiwan's Directorate General of Budget, Accounting and Statistics last Nov. 20 pegging Taiwan's 2009 economic growth at 2.12 percent. The agency is expected to issue a revised forecast Feb. 19.
Morgan Stanley Taiwan, which had previously pegged Taiwan's economic growth at 0.5 percent for 2009, said the country's gross domestic product (GDP) would contract by between 1.5 percent and 8.8 percent for the year, and expected GDP to decline another 2.2 percent in 2010.
Global investment firms' recent reports contend that Taiwan's export-oriented economy will not be able to maintain positive growth in the face of a severe drop-off in exports caused by the global recession.
In yesterday's report, Morgan Stanley Taiwan predicted the Taiwan's exports would shrink by 23 percent in 2009. On Monday, the country reported a fall of 44.1 percent drop in exports in January due to the nine-day Lunar New Year holiday, the biggest monthly decline in history.
The firm also predicted that Taiwan's benchmark stock exchange index, the Taiex, would fluctuate between 3,350 points and 5,400 points in the coming 12 months, with the most likely level 4,200 points.
It advised investors to increase their investments in telecommunications, domestic consumption, and blue chip technology shares.
In response to the forecast, the Council for Economic Planning and Development (CEPD) reiterated that the government has proposed and carried out many measures to pump up the economy to try and maintain economic growth in 2009 at 2.5 percent.


Updated : 2021-10-20 11:32 GMT+08:00