Academia Sinica yesterday cut its forecast for this year’s GDP growth to 1.94 percent from a previous estimate of 3.81 percent made in December last year, citing sluggish momentum on exports as a result of global economic uncertainty, which may further impact domestic demand.
The latest forecast from the nation’s top research institute was the weakest among all domestic think tanks and it was also lower than the 3.03 percent growth forecast issued by the Directorate-General of Budget, Accounting and Statistics (DGBAS) in May.
The DGBAS is scheduled to update its forecast on July 31.
“Worse-than-expected international trade was the main adjustment in this revision, because world outlook and global trade activity remain very weak and uncertain,” Ray Chou (周雨田), an economic research fellow at Academia Sinica, told a press conference.
Exports fell 4.7 percent from a year ago in the first six months, marking one of the worst performances among countries in Asia, with exports to the US, Europe, China and Hong Kong all slowing down.
The lingering global economic uncertainty also prompted Academia Sinica to cut its growth forecast for the output sector to 0.87 percent this year from the 5.15 percent estimate it made in December last year.
Chou said sluggish external demand would further affect domestic demand and weaken the investment intentions of domestic firms, especially capital investment on equipment. The institute therefore revised down its growth forecast for private investment to minus-0.5 percent this year, from 2.2 percent previously.
Academia Sinica also adjusted downward its growth forecast for private consumption this year from 2.72 percent to 2.1 percent, as the government’s move to raise energy prices and a worsening stock market performance dampened consumer spending in the second quarter.
The institute forecast annual growth in headline inflation at 1.8 percent this year, up from the 1.16 percent it estimated previously.
Academia Sinica expects the economy to contract 0.89 percent from a year earlier in the second quarter, but to rebound with 2.72 percent growth and 5.29 percent growth in the third and fourth quarters respectively on the back of a lower base.
Peng Shin-kun (彭信坤), director of Academia Sinica’s Institute of Economics, said it was almost a “mission impossible” for the nation’s economy to grow more than 3 percent this year.
However, Hung Jui-bin (洪瑞彬), director-general of the Council for Economic Planning and Development’s economic research department, said the institute’s forecast was too pessimistic.
Despite both external and internal uncertainties increasing more than previously expected, Hung said the government has been launching various short-term and long-term projects to stimulate growth in exports, investment and consumption, and that it is hoping to see positive effects very soon.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
US PUBLICATION: The results indicated a change in attitude after a 2023 survey showed 55 percent supported full-scale war to achieve unification, the report said More than half of Chinese were against the use of force to unify with Taiwan under any circumstances, a survey conducted by the Atlanta, Georgia-based Carter Center and Emory University found. The survey results, which were released on Wednesday in a report titled “Sovereignty, Security, & US-China Relations: Chinese Public Opinion,” showed that 55.1 percent of respondents agreed or somewhat agreed that “the Taiwan problem should not be resolved using force under any circumstances,” while 24.5 percent “strongly” or “somewhat” disagreed with the statement. The results indicated a change in attitude after a survey published in “Assessing Public Support for (Non)Peaceful Unification
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
The China Coast Guard has seized control of a disputed reef near a major Philippine military outpost in the South China Sea, Beijing’s state media said, adding to longstanding territorial tensions with Manila. Beijing claims sovereignty over almost all of the South China Sea and has waved away competing assertions from other countries as well as an international ruling that its position has no legal basis. China and the Philippines have engaged in months of confrontations in the contested waters, and Manila is taking part in sweeping joint military drills with the US which Beijing has slammed as destabilizing. The Chinese coast guard