Taiwan Cuts 2016 Economic Outlook as Exports Seen FallingChinmei Sung and Cindy Wang
Taiwan cut its economic growth forecast for 2016 as China’s slowdown weighs on export demand.
The economy will expand 1.47 percent this year, less than an earlier projection of 2.32 percent, the statistics bureau said Wednesday. Gross domestic product contracted 0.52 percent in the fourth quarter from a year earlier, steeper than the originally reported 0.28 percent decline.
“Quarterly real GDP this year is expected to improve sequentially because of a low comparison basis,” Directorate General of Budget, Accounting and Statistics Minister Shih Su-mei said. “The full-year projection could be the second lowest since the global financial crisis, indicating insufficient domestic growth momentum.”
Taiwan’s export-led economy has been buffeted by a slowdown on the mainland, and as China becomes an increasingly sophisticated competitor in high-tech manufacturing. It now falls to President-elect Tsai Ing-Wen to find ways of reviving sluggish growth.
The forecast for exports was lowered to minus 2.78 percent for 2016, from 1.97 percent growth seen previously.
External factors will continue to weigh on the local economy given a significant reduction in sales of mobile devices, increasing market share by China’s own consumer electronics and mainland support for its own supply chains.
Growth in 2015 was revised from 0.85 percent to 0.75 percent, the worst since 2009.
“Growth engines are stalled,” Rick Lo, senior economist at Taipei-based Fubon Financial Holding Co. said. He expects the central bank to cut the main rate by 12.5 basis points every quarter this year to help bolster the economy.