Taipei, August 14 (CNA) Taiwan’s economic growth for 2012 will finish below 2 percent due to declining exports and deepening concerns over the global economic slowdown, a Taiwanese economist said Tuesday.
“Not being able to maintain at least 2 percent growth is an inevitable outcome,” said National Central University economics professor Chiou Jiunn-rong at a seminar on the economy held by the Taiwan Brain Trust.
Chiou said that because Taiwan is an export-oriented country, once its exports tumble, economic growth will inevitably be seriously affected.
The country’s exports fell 5.8 percent in the first seven months of the year from the same period a year earlier to $171.6 billion, and exports in July contracted year-on-year for the fifth consecutive month.
But it was the magnitude of the July decline, 11.6 percent from June 2011 to $24.8 billion, that caught economists’ eyes because July is traditionally Taiwan’s peak season for exports.
The sharp decline was indeed a warning sign of the tough road ahead, Chiou said.
The economist also urged the government not to see a free trade pact with China as a potential solution to the problem, because exports to China have plunged significantly over the past seven months.
Taiwan’s exports to China and Hong Kong from January to July posted negative growth of 9.1 percent year-on-year, far higher than the overall 5.8 percent decline.
Huang Tien-lin, a former policy adviser to the president, who also attended the seminar, supported Chiou’s views, saying that Taiwan’s economy is facing the threat of being marginalised.
“Taiwan is a small economy. Once capital and human talent flows into a large economy, the small economy tends to be marginalised by the larger one,” Huang warned.