The Directorate-General of Budget, Accounting and Statistics (DGBAS) does not have to trim its growth forecast for Taiwan again this year if exports stop the downward trend, DGBAS Minister Chu Tzer-ming (朱澤民) said yesterday.
Chu made the remarks as he answered questions at a meeting of the legislature’s Finance Committee when legislators raised doubts about the accuracy of the agency’s growth projections.
The IMF on Tuesday cut this year’s growth forecast for Taiwan to 0.8 percent from 2.1 percent, lower than the 1.61 percent uptick DGBAS predicted in August.
Photo: Peter Lo, Taipei Times
Export showings would determine whether further downward revisions are necessary and data should be encouraging going forward, Chu said.
Exports account for 60 percent of Taiwan’s GDP.
Outbound shipments last month expanded 3.4 percent, reversing a 12-month contraction, due to strong demand for servers and graphics cards used in artificial intelligence (AI) development, the Ministry of Finance said yesterday afternoon.
If improvement in exports can sustain in the whole quarter, Taiwan and its GDP growth would stay on a healthy course of recovery, Chu said, adding that rising geopolitical conflicts require caution and close monitoring.
The Israel-Hamas war would have a very limited impact on Taiwan in light of their small share in the nation’s trade, the ministry said.
Taiwan’s exports to Israel totaled US$1.1 billion last year, 0.2 percent of Taiwan’s overall outbound shipments.
Taiwan’s imports from Israel, consisting mainly of precision optical machinery, totaled US$2.15 billion last year, making up 0.5 percent of the nation’s imports, Chu said.
Chu dismissed worry over a potential second wave of inflation, saying that the recent advance in the consumer price index to almost 3 percent was due to heavy rains disrupting vegetable and fruit supplies, but unfavorable weather would not last.
Although international crude oil prices recently approached US$90 a barrel, they would not create the same splashes in the global economy as they did last year following a spate of monetary tightening, Chu said.
Unlike Russia and Ukraine, Palestine and Israel do not export crude oil or grains and other commodities to the rest of the world, meaning the conflict would not directly affect prices globally, Chu said.
Additional reporting by CNA
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