By Lee Chyen Yee
TAIPEI, Dec 11 (Reuters) - Taiwan economic growth is expected to slow in 2009 to its weakest pace in eight years as the global downturn pushes the island's key export markets into recession and weighs on domestic consumption, a Reuters poll shows.
Economists slashed their forecasts for 2009 growth to 0.7 percent from 4.1 percent in a similar poll in September, when major U.S. banks buckled under the strain of the global credit crisis, and 5.0 percent in a survey in July.
Five respondents forecast that the economy would contract in 2009.
The 2009 growth forecast is lower than the statistics agency's forecast of 2.12 percent, a pickup from expected growth this year of 1.87 percent.
Economists see 2010 growth picking up to 3.0 percent as the global economy starts to recover.
"Taiwan's outlook basically depends on a recovery in the external climate, particularly in exports," said Joseph Lau, an economist at Credit Suisse.
Reflecting Taiwan's exposure to global trade, exports fell in September, October and November, having maintained annual growth of some 10 percent to 25 percent for most of the year.
Economic growth in China, its biggest export destination, is also slowing and it is buying up less of Taiwan's flagship products, such as computer chips, laptops, mobile phones and chemicals.
The economic slide will be accompanied by a slide in the
currency, the poll suggests. The Taiwan dollar
Analysts forecast a 2009 trade surplus of $24.7 billion, bigger than $16.2 billion in the previous poll, reflecting expectations that the island's import bill will fall due to a sharp decline in commodity prices. The surplus will probably narrow to $24.4 billion in 2010.
The trend in domestic consumption for this year and next has also prompted economists to revise down Taiwan's inflation to 1.0 percent for 2009 from 2.5 percent in September, with consumer prices seen rising by 1.4 percent in 2010. Results of the latest survey:
GDP CPI TRADE BALANCE
pct pct US$ bln
2009 2010 2009 2010 2009 2010 Chinatrust 1.7 3.5 1.4 1.6 27.5 22.0 Citigroup 1.5 3.0 1.0 1.2 28.2 34.4 Credit Suisse -1.1 2.1 1.4 1.4 23.0 17.2 DBS 1.0 -- 0.8 -- 27.6 -- JihSun Int'l Bank 1.8 2.5 3.0 2.8 25.3 28.3 JPMorgan -0.4 4.6 -- -- -- -- Masterlink Securities -0.6 -- 0.5 -- 19.73 -- Mega Securities 1.5 -- 0.4 -- 20.0 -- Standard Chartered 0.7 3.2 1.3 1.6 24.1 24.4 Taiwan Securities -2.1 2.8 0.9 1.2 17.2 22.9 UBS -1.6 2.9 0.4 0.7 28.4 30.5 -------------------------------------------------------------- Median 0.7 3.0 1.0 1.4 24.7 24.4 Forecasts for Taiwan dollar to the U.S. dollar:
By end-June 2009 By end-Dec 2009 Credit Suisse 35.5 34.8 DBS 32.7 31.8 HSBC 36.0 36.0 Jih Sun Int'l Bank 35.2 34.6 Masterlink Securities 34.6 33.5 Mega Securities 34.0 34.0 Standard Chartered 34.1 33.0 Taiwan Securities 35.5 35.8 Domestic bank 34.0 32.5 Foreign Bank A 34.3 33.3 Foreign Bank B 35.0 34.2 ------------------------------------------------------------- Median 34.6 34.0 Forecasts made in previous Reuters surveys:
GDP CPI TRADE BALANCE
pct change pct change US$ bln
2008 2009 2008 2009 2008 2009 Sep 2008 4.2 4.1 3.8 2.5 14.9 16.2 Jul 2008 4.6 5.0 3.5 2.9 23.8 22.2 Mar 2008 4.1 4.6 2.3 2.1 27.3 28.1 Dec 2007 4.1 -- 2.0 -- 28.2 -- Sep 2007 4.5 -- 1.6 -- 25.5 -- Jun 2007 4.7 -- 1.7 -- 29.1 -- Mar 2007 4.7 -- 1.8 -- 23.8 -- Historical data:
GDP CPI TRADE BALANCE
pct pct US$ bln
2003 3.50 -0.28 22.59
2004 6.15 1.61 13.61
2005 4.16 2.31 15.82
2006 4.80 0.60 21.32
2007 5.70 1.80 27.43
-----------------------------------------------------------
5-yr Average 4.86 1.21 20.15