IMF cuts Taiwan GDP growth forecast for 2022

04/19/2022 09:36 PM
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Washington, April 19 (CNA) The International Monetary Fund (IMF) on Tuesday lowered its forecast for Taiwan's gross domestic product (GDP) growth in 2022, as the Russian invasion of Ukraine impacts global economic prospects.

In its latest World Economic Outlook, the IMF said it has cut its forecast for Taiwan's GDP growth by 0.1 percentage points from its previous estimate made in October to 3.2 percent.

The IMF is more cautious than Taiwan government about GDP growth for 2022.

In February, the Directorate General of Budget, Accounting and Statistics (DGBAS) forecast Taiwan's GDP will grow 4.42 percent.

Chu Tzer-ming (朱澤民), head of the DGBAS, said in late March that the agency expects to lower its forecast after taking the geopolitical crisis into account but emphasized growth will still hit 4 percent or higher.

The IMF predicts Taiwan's economy will grow 2.9 percent in 2023.

IMF's views on inflation in Taiwan

As rising inflation has become a global concern, the IMF said it expects Taiwan's consumer price index (CPI) to increase 2.3 percent in 2022, above the 2 percent alert level, and up 0.8 percentage points from its previous forecast in October.

In the wake of more expensive imported commodities, Taiwan's CPI rose by 3.27 percent in March from a year earlier, its highest rise since September 2012, when the index grew by 3.42 percent, the DGBAS said. In the first three months of this year, the local CPI grew 2.81 percent, the DGBAS added.

Taiwan's CPI is forecast to grow 2.2 percent in 2023, according to the IMF.

The IMF said it expects Taiwan's jobless rate to hit 3.6 percent in 2022 and 2023.

Global outlook

Global GDP is forecast to grow 3.6 percent in 2022 and 2023, a downward revision of 0.8 percentage points and 0.2 percentage points respectively from the IMF's earlier forecasts made in January, before Russia invaded Ukraine on Feb. 24.

"Global economic prospects have worsened significantly since our last World Economic Outlook forecast in January. At the time, we had projected the global recovery to strengthen from the second quarter of this year after a short-lived impact of the Omicron variant," the IMF said.

"Since then, the outlook has deteriorated, largely because of Russia's invasion of Ukraine -- causing a tragic humanitarian crisis in Eastern Europe -- and the sanctions aimed at pressuring Russia to end hostilities," the IMF added.

The IMF has also lowered its growth forecast for the U.S. economy, the largest in the world, by 0.3 percentage points from its January estimate to 3.7 percent in 2022 and 2.3 percent in 2023, while the agency cut its forecasts for GDP growth in the eurozone by 1.1 percentage points and 0.2 percentage points, respectively, to 2.8 percent in 2022 and 2.3 percent in 2023.

Other Asian economies

As for China, the second largest economy in the world, the IMF forecast GDP growth will hit 4.4 percent and 5.1 percent, respectively, in 2022 and 2023, a reduction of 0.4 percentage points and 0.1 percentage points from its January estimates.

Elsewhere in Asia, Japan's GDP is expected to grow 2.4 percent in 2022 and 2.3 percent in 2023, while South Korea's economy is forecast to grow 2.5 percent this year and 2.9 percent next year, according to the IMF.

The IMF also forecasts that Singapore's GDP will grow 4.0 percent in 2022, and 2.9 percent in 2023, while Hong Kong's growth is expected to hit 0.5 percent this year and 4.9 percent next year.

(By Chiang Chin-yeh and Frances Huang)

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