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Government to downgrade 2013 GDP growth forecast again

2013/11/13 19:39:47

Taipei, Nov. 13 (CNA) The government confirmed Wednesday that it will cut its forecast for Taiwan's gross domestic product (GDP) growth for the year once again, after the country witnessed exports, private investments and private consumption slow in the third quarter.

Speaking at a hearing of the Legislative Yuan's finance sub-committee, Directorate General of Budget, Accounting and Statistics (DGBAS) Minister Shih Shu-mei told lawmakers that her agency will announce a downgraded forecast on Nov. 29.

After Taiwan reported third quarter growth of 1.58 percent from a year earlier in late October -- far below an earlier estimate of 2.47 percent -- the market has widely expected that the government would cut down its current standing forecast of 2.31 percent growth.

The current GDP prediction was made in August and was a lowering from the earlier estimate of 2.40 percent growth made in May.

Lu Shiow-yen, a lawmaker with the ruling Kuomintang, pressed Shih to reveal whether Taiwan will be able to maintain 2 percent growth over the year, but the DGBAS minister said her agency is still compiling data and will not announce the updated forecast until scheduled to do say.

The Taiwan Institute of Economic Research (TIER) was the first economic think tank to lower its forecast for 2013 GDP growth to below 2 percent. TIER released its revised estimate Nov. 5, predicting growth of just 1.93 percent compared with an earlier forecast of 2.52 percent.

Earlier on Nov. 1, British bank Barclays Plc cut its forecast to 1.6 percent from 2.2 percent.

In the third quarter, Taiwan's exports in merchandise and services in Taiwan dollar terms rose 1.68 percent, far lower than an earlier estimate of 3.66 percent, while private consumption grew 1.56 percent, failing to reach a target of a 2.44 percent.

Meanwhile, the country's capital formation, which includes public and private investments, rose only 1.04 percent in the third quarter, below the previous prediction of a 3.02 percent increase.

(By Stacy Wu and Frances Huang)