《TAIPEI TIMES》 DGBAS forecasts slower economic growth ahead

By Crystal Hsu / Staff reporter

Taiwan’s economy last quarter expanded 4.01 percent from a year earlier, but growth is expected to slow in the next six months as global economic uncertainty saps exports, leaving domestic demand to drive the economy, the Directorate-

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General of Budget, Accounting and Statistics （DGBAS） said yesterday.

The statistics agency trimmed its forecast for GDP growth this quarter to 1.52 percent and 1.1 percent in the first quarter of next year, as international technology titans cancel orders and adjust inventory to cope with tepid sales.

“Inventory corrections would gain strength next quarter, but hopefully, would ease in the following quarter,” as global inflation and monetary tightening weaken demand for consumer electronics, DGBAS Department of Statistics Director Tsai Yu-tai （蔡鈺泰） said.

The agency cut its GDP growth projection for this year to 3.06 percent, a retreat of 0.7 percentage points from its August forecast.

DGBAS Minister Chu Tzer-ming （朱澤民） attributed it to disappointing exports, which are forecast to decline 3.89 percent this quarter and another 5.53 percent and 5.7 percent in the next two quarters.

The US and Europe might slip into recession next year due to drastic interest rate hikes, while China’s insistence on maintaining its “zero COVID” policy would further strangle its economy, Chu said.

The backdrop bodes ill for Taiwan’s exports, as these destinations account for a big majority of Taiwan’s outbound shipments, he said.

That explains why external demand contributed a small 0.61 percentage points to GDP growth during the July-to-September period, while domestic demand accounted for 3.94 percentage points, the DGBAS report said.

Moreover, the tourism sector has yet to fully recover from the COVID-19 pandemic and local companies have cut capital expenditure, Chu said.

The DGBAS adjusted its GDP growth forecast for next year to 2.75 percent, down 0.3 percentage points from its forecast three months earlier, but better than the global economy’s forecast of 1.5 percent growth by the IMF, the minister said.

Private consumption last quarter staged an impressive 6.95 percent increase as social gatherings recovered momentum amid eased disease controls, the DGBAS said.

The GDP component is expected to gain 5.48 percent next year, the largest growth driver, followed by an estimated 5.29 percent uptick in capital formation by the public sector and a 5.06 percent increase in capital formation by the government, the agency said.

Consumer prices would pick up 2.94 percent this year, but slow to a 1.86 percent increase next year, affected in part by the high base of comparison this year.

The relatively high inflation this year had to do with a weak local currency as hot money fled Asia, the agency said.

新聞來源：TAIPEI TIMES