The government raised the specter of a recession yesterday after reporting that the economy contracted in the third quarter and could shrink further in the coming quarters.
A recession is defined as two consecutive quarters of contraction.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) said that GDP shrank 1.02 percent in the third quarter from a year ago and could contract another 1.73 percent in the fourth quarter, dragging down this year's full-year growth rate to 1.87 percent, from the 4.3 percent it estimated in August.
As the economic contraction is expected to persist into the first quarter of next year, the DGBAS slashed its GDP growth forecast for next year by more than half to 2.12 percent from the 5.08 percent it predicted in August in the face of slumping exports and tight consumer spending.
Minister of the DGBAS Shih Su-mei (石素梅) said the financial storm that was battering the US and Europe was contributing to recessionary fears as these are the major markets for Taiwanese electronics and communication products.
Shih said the economic picture would remain drab in the first quarter of next year when GDP is forecast to dip 0.31 percent and start a slow recovery for the rest of the year, spurred by increasing government spending and a fiscal stimulus plan.
Exports, the main driver of the nation's economy, declined 0.45 percent in the third quarter and are expected to drop 3.99 percent in the last quarter, the DGBAS report said, predicting that outbound goods and services would contribute a negative 2.53 percent to the economy next year.
Statistics Bureau Director Tsai Hung-kun (蔡鴻坤) said exports were unlikely to rise in the first three quarters of next year, with Taiwan's major trading partners battling recession themselves.
The trend is likely to reverse in the fourth quarter when exports are forecast to gain 1.28 percent, Tsai said.
Inflation, the government's biggest worry last summer, is projected to rise 3.64 percent this year and decelerate to 0.37 percent next year, the report showed.
Tsai dismissed concerns about deflation, saying consumer prices would continue to advance though at a mild pace.
Tsai conceded that GDP growth next year may prove elusive if the government fails to successfully implement measures to stimulate the economy, such as its planned distribution of consumer vouchers to spur spending.
The voucher plan is forecast to lift the economy by 0.64 percentage points next year, while Chinese tourists are expected to contribute an extra 0.5 percentage points.
The DGBAS put the number of Chinese tourists visiting Taiwan at 3,000 a day next year — although the number averaged 273 in the third quarter and is expected to rise to 500 in the last quarter.
Annual per capita income is estimated at US$18,020 this year and to fall to US$17,651 next year, the report said.
Also See: NT dollar sinks to three-week low on weak expectations
ENDEAVOR MANTA: The ship is programmed to automatically return to its designated home port and would self-destruct if seized by another party The Endeavor Manta, Taiwan’s first military-specification uncrewed surface vehicle (USV) tailor-made to operate in the Taiwan Strait in a bid to bolster the nation’s asymmetric combat capabilities made its first appearance at Kaohsiung’s Singda Harbor yesterday. Taking inspiration from Ukraine’s navy, which is using USVs to force Russia’s Black Sea fleet to take shelter within its own ports, CSBC Taiwan (台灣國際造船) established a research and development unit on USVs last year, CSBC chairman Huang Cheng-hung (黃正弘) said. With the exception of the satellite guidance system and the outboard motors — which were purchased from foreign companies that were not affiliated with Chinese-funded
PERMIT REVOKED: The influencer at a news conference said the National Immigration Agency was infringing on human rights and persecuting Chinese spouses Chinese influencer “Yaya in Taiwan” (亞亞在台灣) yesterday evening voluntarily left Taiwan, despite saying yesterday morning that she had “no intention” of leaving after her residence permit was revoked over her comments on Taiwan being “unified” with China by military force. The Ministry of the Interior yesterday had said that it could forcibly deport the influencer at midnight, but was considering taking a more flexible approach and beginning procedures this morning. The influencer, whose given name is Liu Zhenya (劉振亞), departed on a 8:45pm flight from Taipei International Airport (Songshan airport) to Fuzhou, China. Liu held a news conference at the airport at 7pm,
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
RSS