Taiwan’s economic growth for 2012 is projected at 2.08 percent, down from 3.03 percent predicted in May, with per capita gross domestic product of US$20,290, according to the Directorate-General of Budget, Accounting and Statistics July 31.
“The ongoing sovereign debt crisis in Europe is responsible for this gloomy outlook,” a DGBAS official said. “Weaker-than-expected growth in the U.S. and other emerging markets also contributed to the downward revision.”
In its latest forecast, the DGBAS estimates that Taiwan exports will inch up 0.07 percent this year to US$308.5 billion, while imports will contract 0.54 percent to US$279.9 billion.
Private consumption is projected to grow at an annual rate of 1.77 percent, 0.26 of a percentage point lower than the May estimate.
“Declining stock prices and wage levels are dampening consumer confidence,” the official said, adding that consumer prices are set to increase 1.9 percent, 0.06 of a percentage point higher than previously expected.
Capital formation, the broadest measure of investment, is poised to rise 5.76 percent in the second half following 9.4 percent and 8.35 percent drops for the first two quarters.
“This growth will cap the annual decline at 2.84 percent, which is still worse than the 1.7 percent forecast in May,” the official added.
Advance DGBAS estimates reveal the local economy contracted 0.16 percent in the second quarter of 2012, bringing growth to 0.11 percent for the first half of the year. The figure is 0.93 of a percentage point lower than expected and marks the first decline since the fourth quarter of 2009.
Exports of Taiwan’s leading products declined 5.4 percent for the quarter, compared with a 4 percent drop for the first quarter of 2012. Similarly, imports fell 5.78 percent.
While domestic demand was propped up by the booming retail and food services sectors, along with strong sales of compact cars, this momentum was partially offset by a weakening stock market as private consumption inched up 0.87 percent. (JSM)