Taiwan’s economic growth rate is likely to drop to 3.4 percent in 2012 but is expected to bounce back the following year, the Asian Development Bank forecast yesterday.
The growth rate is forecast to fall from 4.04 percent in 2011 on global uncertainty and China’s more moderate expansion, given that China is Taiwan’s largest trading partner, according to the report that was released in Hong Kong.
The growth forecast was lower than the 3.85 percent projected by Taiwan’s directorate-General of Budget, Accounting and Statistics in February and the Cabinet’s goal of 4.3 percent.
Although there are more positive business indicators than in late 2011, the gloomy global situation will limit export growth in Taiwan, which is an export-oriented economy, the Manila-based bank said in the report.
“Domestic demand should continue to provide a relatively strong base, supported by rising incomes reaching around $21,000 per capita this year,” it said.
Taiwan’s economic growth will improve with better global conditions in 2013 but in the long run, increased R&D and investment will be needed for a “broad-based, stable growth through diversification and restructuring of the economy,” the report said.
Restored domestic and international demand in 2013 will boost Taiwan’s growth rate to 4.6 percent, it predicted.
It also forecast an economic growth rate of 6.9 percent in 2012 and 7.3 percent in 2013 for developing Asian economies.