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Officials uncertain whether Taiwan can achieve 2% growth

2013/10/21 22:44:56

Taipei, Oct. 21 (CNA) Neither Taiwan's top economic planner, stung by a projection made in February that went badly wrong, or the chief of the country's statistics bureau were able to say on Monday if Taiwan's economy will grow by at least 2 percent this year.

"Maintaining growth above 2 percent shouldn't be a problem. I can only say I have confidence, but I can't guarantee it," said Kuan Chung-ming, head of the Council for Economic Planning and Development (CEPD), during an Economics Committee hearing at the Legislative Yuan.

Shih Su-mei, the head of the Directorate-General of Budget, Accounting and Statistics (DGBAS), appeared less confident that Taiwan would achieve the target during an appearance before the Legislature's Finance Committee.

She said more time was needed to assess whether the economy will be able to grow 2 percent this year given the weakness in the country's exports in the third quarter, which totaled US$76.20 billion, short of the DGBAS's projection of US$78.04 billion.

The Chung-Hua Institution for Economic Research (CIER) on Oct.15 cut its forecast for Taiwan's economic growth this year to 2.01 percent, from the 2.28 percent it estimated in July, citing lower-than-expected economic momentum in the second half of the year.

At his hearing, Kuan was given a hard time for his confident projection in February that Taiwan would see a "golden cross," with growth exceeding 4 percent and the jobless rate falling below 4 percent.

When asked by an opposition lawmaker to apologize for the CEPD's inaccurate forecast, Kuan denied that the CEPD made any economic forecasts and explained that he set the golden cross goal just as students set a goal of finishing in the top two of their class.

"If a student doesn't make it into the top two, should we break the student's legs?" Kuan said.

The official contended that when he presented his golden cross concept in February, both the domestic and global economy seemed to be improving.

At the time, the DGBAS had revised its 2013 GDP growth forecast for Taiwan upward from 3.53 percent to 3.59 percent on the strength of improving conditions at home and abroad, and international brokerages were also optimistic about the global economic outlook.

Under those circumstances, Kuan said, it was possible that the domestic economy would grow faster and that unemployment would fall.

Taiwan's seasonally adjusted unemployment rate has hovered between 4.16 percent and 4.20 percent this year.

The CEPD chief ventured a new prediction, however, saying that with the global economic situation now improving, the domestic economy should take a turn for the better in the future.

He said rising inbound investment from Taiwanese businessmen operating abroad and the launch of the first phase of a free economic pilot zone project would help boost domestic activity at home.

(By Lin Hui-chun, Tseng Ying-yu and Y.L. Kao)