Taiwan's 2007 economic growth expected to hit 4.58%: DGBAS

This article was published by the Macroview Weekly on August 29, 2007. It reports that according to the Directorate General of Budget, Accounting and Statistics (DGBAS), Taiwan is expected to achieve an economic growth rate of 4.58 percent for 2007.

In February, the DGBAS predicted Taiwan's economic growth for 2007 at 4.3 percent. In May, it marked up the rate to 4.38 percent. Now, it revised the rate further up to 4.58 percent.

The economic growth rate for the first quarter of 2007 was also adjusted upward from the estimated 4.15 percent in May to 4.18 percent, with the growth rates for the second to fourth quarters estimated at 5.07 percent, 4.47 percent and 4.6 percent, respectively.

The DGBAS also predicted that Taiwan's consumer price index for 2007 will go up by 1.48 percent from 2006.

The disposable household income gap between the richest and poorest families in Taiwan in 2006 decreased to 6.01 fold, a six-year low. DGBAS officials attributed the narrowing of the gap to the government's social welfare and tax policies, which helped reduce the gap by 1.45 fold.

Statistics provided by the DGBAS show that the average disposable income per household in 2006 was NT$1.1 million (US$33,282), up 1.6 percent from the previous year. If non-consumption expenditures are excluded, then the average disposable income per household was NT$913,000, up 2.1 percent year-on-year.

DGBAS officials described the narrowing of the income gap as the result of Taiwan's stable economic growth. In 2006, the number of new employees amounted to 169,000, which helped increase the earnings of low-income families.

The government's social welfare policies also significantly contributed to the decrease in the household income gap. In 2006, the government provided a number of subsidies for low-income families, elderly people from middle and low-income families, elderly farmers, people with mental disabilities, and disaster victims, among others. These subsidies helped reduce the household income gap by 1.3 fold.

Meanwhile, the average monthly wage for local workers stood at NT$36,530 (US$1,105) in the first half of 2007, marking a 1.53-percent rise year-on-year. The growth rate was the highest in seven years. More significantly, June 2007 marked the 13th consecutive month that the average increase has surpassed 1 percent. This was a strong signal of a rising trend.

According to DGBAS officials, regular wage refers to the base pay, including holiday pay, vacation pay and sick time pay, but excluding overtime pay and irregular bonus pay. The average wage during the January-June period was NT$48,174, up 1.64 percent from the same period of 2006.

In addition, the number of new employees during the first six-month period saw an annual increase of 95,000 to register 6.09 million. The growth is the fourth-highest of the same period over the recent seven years, indicating steady growth in the local labor market.

During the first six months of 2007, the industrial sector registered a 1.44-percent rise of new employees from 2006, while the service sector posted a 1.71-percent increase. The manufacturing industry recruited the greatest number of 31,000 new employees during the same period.

The average unemployment rate in the first seven months of 2007 hit a new low of 3.88 percent compared with the same period during the last seven years. According to DGBAS officials, the unemployment rate in July 2007 stood at 4.03 percent, a drop of 0.02 percent over the same month of 2006. Specifically, the number of unemployed registered 433,000 in July 2007, while the average number of jobless persons in the first seven months stood at 415,000.

The number of employed totalled 10.32 million in July 2007, up 59,000 from June, or 187,000 over the same month. The average number of employed registered 10.25 million in the first seven month of 2007, an increase of 203,000 over the same period of 2006.

The labor force participation rate in July 2007 stood at 58.45 percent, while the average labor force participation rate in the first seven months registered 58.19 percent, the highest during the last decade.

In terms of educational background, the jobless rate for people with senior high or vocational school education was the highest, standing at 4.45 percent. The unemployment rate for those with university or higher education registered 4.2 percent. The jobless rate for people with junior high or lower education was the lowest, at 3.18 percent.