Academia Sinica, Taiwan’s top research institute, has lowered its forecast for the island’s 2012 economic growth Thursday amid the global economic slowdown.
It estimated the island’s gross domestic product growth rate in 2012 could fall to 3.81 percent, lower than this year’s 4.38 percent.
The figure was by far the lowest forecast among Taiwan’s research institutes and think tanks.
Ray Chou, a research fellow with the Institute of Economics of Academia Sinica, attributed the low forecast to the declining global economy, saying Taiwan’s industrial production index and export orders are both declining.
“The development of the European debt crisis is a critical factor [influencing the GDP],” Chou told a press conference on Thursday.
Although the institute estimated that the inflation rate will be low and stable in 2012, the private consumption growth rate will still fall from 3.38 percent this year to 2.72 percent in 2012 due to the negative impact caused by workers’ leaves of absence and declining Taiwan share prices, Chou said.
He said the cross-Strait Economic Cooperation Framework Agreement (ECFA), an agreement signed between Taiwan and the Chinese mainland last year, will continue to boost the island’s exports, as more than 90 percent of products on the ECFA’s early harvest list will have zero tariffs, despite continued declines in demand from Europe and the United States.