Economic growth goal for 2008 set at 4.8 percent, says Premier

This article was published by the Macroview Weekly on January 2, 2008. According to this article, the government in Taiwan recently announced that the country's economic growth target for 2008 would be a brisk 4.8 percent. However, government officials acknowledged that many citizens had not perceived the degree of economic progress, due to the impact of rising prices of essential goods.

The government's Directorate-General for Budget, Accounting and Statistics (DGBAS) had estimated inflation-adjusted gross domestic product expansion for 2007 at 5.46 percent, which was considerably higher than the initial 4.6 percent target.

Moreover, the value of gross private capital investment was forecast to rise 5.07 percent in 2007 to NT$2.67 trillion, while two-way trade expanded 24.07 percent to NT$529.4 billion.

“Due to the improvement in the domestic investment environment and continued expansion of merchandise trade, the economy has expanded at a steady and healthy pace,” government officials said.

According to officials, the government would continue the administrative focus of “great investment and great warmth” and comprehensive policy principles of “boosting investment in Taiwan, putting priority on the care of the disadvantaged, sustainable development of the national lands, forceful sweeping away of corruption and organized crime and expansion of foreign relations”.

Officials also said that the government aimed to attain the goals of “boosting investment in Taiwan, creating employment opportunities, narrowing the gap between urban and rural areas and reducing income disparities”.

Based on a consideration of subjective and objective conditions, the government set the annual economic growth target for 2008 at 4.8 percent, compared to the DGBAS forecast of 4.53 percent real GDP growth in 2008.

The government aimed to hold the unemployment rate to no higher than 3.8 percent and the annual rise in the consumer price index to 2.0 percent.

“Since the global economic growth rate faces a slowdown in 2008, these economic targets are highly challenging, but will fully manifest the active administrative capability and concepts of our team,” officials said.

In addition, the 2008 National Construction Plan submitted by the Council for Economic Planning and Development (CEPD) set 2008's target for per capita income at US$18,000 and posited the creation of 180,000 new jobs.

The CEPD plan noted that several key indices had exceeded targets in the 2008 plan in addition to overall economic growth. These included holding CPI price inflation to 1.65 percent compared to the 2 percent target, an increase of 1.8 percent in employment compared to the 1.5 percent targeted rise, and a labor-participation rate of 58.2 percent compared to the target of 58.0 percent.

However, the annual unemployment rate of 3.9 percent was higher than the target of a maximum 3.8 percent, and the forecast US$16,768 per capita income was slightly less than the targeted US$16,886, due to greater than expected depreciation of the New Taiwan dollar against the green back. This was despite the fact that the per capita income in New Taiwan dollar terms of NT$553,430 was higher than the 2007 target of NT$535,622.