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Senior govt official sees worst over for Taiwan's economy

Updated: 2009-05-23 08:13

(HK Edition)

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TAIPEI: The worst of the global economic downturn and its adverse impact on Taiwan's economy are over, and the government is "cautiously optimistic" on the island's short-term economic prospects, a top government official said Friday.

"Judging from a quarter-to-quarter basis, we can see that the second quarter is better than the first and that the third will be better than the second. Therefore, the first quarter is the bottom and the worst scenario is already over," Chiu Cheng-hsiung, the second man of the "cabinet", said before the "2009 Asia Political and Economic Prospects" forum hosted by the Taiwan Institute of Economic Research, a local think tank.

Chiu's remarks came in the wake of the announcement a day earlier by the Directorate General of Budget, Accounting and Statistics (DGBAS) that Taiwan's economic growth in the first quarter (Q1) of this year declined 10.24 percent from the same period of 2008. This is the worst single-quarter slump since 1961, when the government began compiling quarterly per capita income.

Despite the poor Q1 performance, the DGBAS said, there are some signs that the decline is starting to slow. It forecast that the fall will shrink to 8.5 percent in the second quarter and further narrow to 2.98 percent in Q3.

The agency forecast a recovery in the last quarter this year, with the economy seen posting a 5.2 percent growth. Taiwan's export trade, a major driver of economic growth, is expected to be back to normal.

Chiu noted that despite the "cautious optimism,"many challenges lie ahead which will require cooperation between the government and private sectors.

"Taiwan's industrial development needs to rely not only on exports but also on emerging industries, which is in line with the government's development strategies that will facilitate innovation in six key emerging industries," Chiu stated.

To cope with drastic changes in the global economy and enhance Taiwan's industrial development, the government is mapping out concrete strategies aimed at expanding market scale, increasing production value and stimulating development opportunities in six emerging industries. These six sectors are tourism, medicine and health care, biotechnology, green energy, culture and creativity and high-end agriculture.

China Daily/CNA

(HK Edition 05/23/2009 page5)

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