TAIPEI, Taiwan - The Asia Development Bank (ADB) adjusted its forecast of Taiwan's 2013 GDP growth to 2.3 per cent, which is close to the 2.31-per cent growth forecast by the Directorate-General of Budget, Accounting and Statistics (DGBAS).
The ADB indicated that two main Asian economies, mainland China and India, have experienced slower economic activities, affecting Taiwan and other countries in Asia. Consequently, the ADB adjusted its forecast of Taiwan's economic growth rate of 3.5 per cent in April down to 2.3 per cent.
Concerns over the US Federal Reserve's tapering off of quantitative easing have caused investors to retrieve their capital, sending shockwaves throughout capital markets in Asia, analysts said. Although the capital outflow has exposed weaknesses in financial markets in Asia, with high current account balances and high foreign exchange reserves, a financial crisis like the one that occurred in 1997 is unlikely to happen again, analysts said.
The Ministry of Economic Affairs (MOEA) said that it has set a goal of boosting the economy to surpass the DGBAS' forecast, despite unstable economic conditions around the world.
According to a report released by the ADB, with the exception of Japan, economic growth rates in Asia are forecast to be 6 per cent and 6.2 per cent in 2013 and 2014, respectively. The Southeast Asian area is forecast to have 4.9-per cent and 5.3-per cent GDP growth in 2013 and 2014, respectively.
The ADB forecast a 7.6-per cent and 7.4-per cent economic growth rate for mainland China in 2013 and 2014, respectively, and 4.7-per cent and 5.7-per cent economic growth rate for India in 2013 and 2014. The figures were adjusted downward from the ADB's previous forecasts.
While China is trying to wrestle with its credit bubble and shadow banking system, India's growth is hampered by its weak infrastructure and slow investments, the ADB said.
The MSCI Asia Pacific Index has risen 7.5 per cent so far this year, much lower than the 19-per cent rise in the S&P 500 Index in the US