Taiwan economy to shrink almost 3% in 2009, says government agency

Taiwan's economy will contract by 2.97% in 2009 compared to a mere 0.12% growth in 2008, according to the latest estimate by Taiwan's Directorate General of Budget, Accounting and Statistics (DGBAS). The island's economy shrank 8.36% in the fourth quarter of 2008, the largest decline ever for a quarter, the government agency said.

Earlier this month, multinational investment firms CLSA Asia-Pacific Markets and Morgan Stanley predicted that Taiwan's economy would contract 11% and 6%, respectively, in 2009 because of a major slump in exports.

The latest government forecast also contrasted sharply with an estimate of 2.12% economic growth issued by the DGBAS on November 20, 2008.

In 2009, Taiwan's exports, the main engine of the island's economic growth, will contract 20.1%, whereas the island's imports will drop 26.2% as compared to the levels in 2008, the DGBAS predicted.

Taiwan's gross national product (GNP) will also contract by 1.57% to NT$12.5 trillion (US$360.2 billion) in 2009, following a decline of 1.83% in the previous year, said the government agency.

Taiwan's per capita GNP will reach US$15,957 in 2009, down from US$17,576 recorded in 2008, the DGBAS said.