Taiwan slashes GDP forecast in 2019

In this file photo, the container freight "YM Wholesome" of the Yang Ming shipping company lying at anchor by the container bridge cranes of the Hamburg Hafen und Logistik AG (HHLA) in Hamburg, Germany, 23 January 2018. (Photo by: Axel Heimken/picture-alliance/dpa/AP Images)

TAIPEI (CNA) — While Taiwan is faced with the challenges of a slower pace of global economic growth, the country is expected to maintain gross domestic product (GDP) growth for 2019 of no less than 2 percent, Chu Tzer-ming (朱澤民), head of the Directorate General of Budget, Accounting and Statistics (DGBAS), said on Feb. 25.

Speaking at a hearing of the finance committee of the Legislature (Legislative Yuan), Chu said that judging from the current economic data, he sees no problem for Taiwan to report 2 percent or higher GDP growth for 2019.

On Feb. 13, the DGBAS said it had lowered its forecast for Taiwan’s 2019 economic growth to 2.27 percent from an earlier estimate of a 2.41 percent increase made in November 2018, compared with an anticipated 2.63 percent increase for 2018.

The downgrade largely reflects rising uncertainty over global demand, prompting the DGBAS to also cut its forecast for Taiwan’s exports of merchandise and services by 0.81 percentage points to 2.25 percent.

The DGBAS is expected to review the economic data and update its GDP growth forecast every three months.

Chu’s assurance came after Tseng Ming-Chung (曾銘宗), secretary-general of the opposition Kuomintang’s legislative caucus, raised doubts about whether the local economy will grow more than 2 percent, since the global economy has shown signs of slowing down.

In January, the World Bank cut its forecast for global economic growth to 2.9 percent from a previous estimate of 3 percent made in June 2018 amid trade tension between the United States and China.

However, Chu admitted that Taiwan could feel the pinch from trade disputes between Washington and Beijing, and the magnitude of the impact will be up to whether the two sides can reach an agreement to resolve their dispute.

Washington and Beijing wrapped up their latest round of trade talks over the weekend. After the negotiations, U.S. President Donald Trump announced on his Twitter page that he is planning to delay a set of additional tariffs on Chinese goods that were due to kick in March 1.

In addition, Chu said that the global energy market is also worth watching at a time when international crude oil prices have been on a rebound, which could boost local consumer prices.

In February, the DGBAS forecast that Taiwan’s consumer price index will rise 0.73 percent.

By Liu Li-jung and Frances Huang