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Citi slashes Taiwan growth forecast for 2012
Publication Date : 11-07-2012
Citi yesterday slashed its Taiwan growth forecast for this year from 3.3 per cent to 2.8 per cent, due to various negative factors.
The company however reiterated its 4.2 per cent forecast for Taiwan's growth next year.
The company made the remarks during a news conference yesterday on its outlook for the second half, presided over by the bank's chief economist Cheng Cheng-mount.
The meeting was held a day after the Ministry of Finance Monday announced Taiwan's June exports totaled US$24.36 billion, a drop of 3.2 per cent from the same period last year and a decline for the fourth month in a row.
That, plus Taiwan's economic indicators for April and May, prompted Citi to lower this year's gross domestic product growth forecast from the original 3.3 per cent to 2.8 per cent, Cheng said. Yet he predicted a moderate rebound will be seen in the second half.
With unsatisfactory exports in April and May, export decline for the second quarter expanded from 4 per cent in the first quarter to 6.4 per cent, compared to the same period last year. However, domestic demand was stronger, with retail for April and May rising 2.3 per cent compared to the first quarter.
The consumer confidence index, on the other hand, was on the decline, indicating consumers may become more prudent in their spending in the future.
According to Cheng, Taiwan's economic growth will still rely on positive developments in cross-strait ties, including the upcoming eighth meeting between Taiwan and China's top negotiators, the signing of a cross-strait investors' protection agreement, and the setup of a currency clearance system.