Taiwan's 2015 Economic Growth Forecast Cut to 3.5%: DGBAS

Due to recent reports of China easing its lending requirements, falling crude oil prices that sap economies of major producers, and Japan's shrinking GDP that could cool global business climate, Taiwan's Directorate General of Budget, Accounting & Statistics (DGBAS) has lately cut its prediction of Taiwan's economic growth in Q4 by 0.25 of a percentage point to 2.83% and next year by 0.01 of a percentage point to 3.5%.

However, DGBAS raised its forecast on 2014 economic growth by 0.02 of a percentage point to 3.43%. H. K. Tsai, director at Department of Statistics of DGBAS, indicates that the United States is the only key economy to  experience stable economic growth, versus less stolid economic prospects in China, Europe and Japan.

DGBAS has reduced the projected value of Taiwan's exports by US$1.6 billion in Q4 and meanwhile chopped the export growth rate by 2.08 percentage points to 1.51%. Nevertheless Tsai believes the recent drop of global oil prices to have positive effect on the island's economy, that a 10% decline in oil price results in 0.37 percentage point drop in  annual growth of Taiwan's consumer price index (CPI) and 0.26 percentage point growth in economy.

DGBAS predicts the CPI growth this year may reach 1.18% and next year drop to 0.91%, but the implicit price deflator of GDP to  rise to 1.45% this year and tumble to minus 0.31% next year.

Lately the World Trade Organization (WTO) members have reached Trade Facilitation Agreement (TFA) to boost global trade by reducing costs and delays for traders, through measures that provide predictability, simplicity and uniformity in customs and other border procedures. TFA will likely create 21 million jobs globally and contribute production value of about US$1 trillion to global economy.

Chung-Hua Institute for Economic Research, an economic think tank in Taiwan, estimates the WTO TFA to help raise Taiwan's GDP by US$5.559 billion and external trade by US$6.02 billion, with exports up US$3.226 billion and imports up US$2.794 billion. (JL)

Taiwan's Predicted 2015 Economic Indicators by DGBAS
Economic indicator	As of  August	As of  November
Economic growth (%)	3.51	3.5
CPI growth (%)	1.46	0.91
Private spending growth (%)	2.81	2.74
Private investment growth (%)	4.29	5.59
Export growth (%)	4.09	3.56
Oil price per barrel	US$102	US$82.5
NT$:US$ exchange rate	30.05	30.88

Source: DGBAS