Taiwan raises economic growth forecast to 5.03 percent for 2011

The China Post news staff

The Cabinet-level Directorate General of Budget, Accounting and Statistics (DGBAS) yesterday revised upward its projection of Taiwan’s gross domestic product (GDP) growth to 5.03 percent in 2011, up 0.52 of a percentage point from the previous prediction of 4.51 percent issued last November, according to DGBAS officials.

DGBAS officials said that the latest world economic forecast indicated that the world economies will continue to grow at a solid pace in 2011. Accordingly, Taiwan’s exports are expected to sustain robust expansion, which, combining buoyant private spending, will push up the nation’s annual GDP growth to 5.03 percent this year from the previous projection of 4.51 percent.

DGBAS forecast Taiwan’s exports to surge 11.10 percent from last year to hit a record high of US$305.1 billion, with the growth to be fueled by the island’s increased shipments to mainland China following the official implementation of the cross-strait economic cooperation framework agreement (ECFA) on Jan. 1 and strong market demand in emerging countries, among others.

On another front, the nation’s imports are projected to soar 9.87 percent to US$276.2 billion in 2011, due mainly to the rising raw materials prices and domestic demand induced by increased exports and inbound investments.

Domestic private spending is likely to grow 3.73 percent, given the expected improvement in employment and pay hikes for employees announced by quite a few local enterprises.

DGBAS also predicted Taiwan’s commodity price index to soar 2.04 percent in 2011 from 2010. Officials said that factors that may fuel inflationary pressure on domestic commodity prices, especially prices for food and energy products, include the ever-rising prices of agricultural and industrial raw materials that are fueled by supply shortages caused by abnormal climate conditions, the spiraling international crude oil prices, and the excessive idle funds flooding the markets. But the appreciation of the New Taiwan dollar against the U.S. dollar, and government’s measures to stabilize commodity prices will help to slow down the inflation of domestic commodity prices. Along with the projected 5.03 percent GDP growth, Taiwan’s per capita GDP and GNP (gross national product) are estimated to reach US$20,596 and US$21,229, respectively, in 2011. Also yesterday, the DGBAS released its advance estimate of Taiwan’s real GDP growth for the fourth quarter of 2010 at 6.48 percent, up 1.78 percentage points from the projection of 4.70 percent issued last November and compared to the 13.59 percent expansion in the first quarter of last year, 12.86 percent growth in the second quarter and 9.80 percent in the third quarter.

DGBAS officials attributed the encouraging GDP performance in the fourth quarter to two major factors. One was that the external sector extended powerful performance with the real exports of goods and services surging 14.97 percent from a year earlier. The other was a 4.51 percent growth of the domestic sector,

For the whole of 2010, the GDP is estimated to have expanded by 10.47 percent, 0.49 percentage points above DGBAS’ previous forecast. Meanwhile, Taiwan’s overall consumer price index inched up 0.96 percent from a year earlier in 2010, and its per capita GDP and GNP increased to US$18,534 and US$19,155, respectively, last year.