(Updates with economist’s comment in fourth paragraph.)
Nov. 24 (Bloomberg) -- Taiwan cut its growth forecasts for this year and next after the island’s economy expanded at the slowest pace since 2009 last quarter, underscoring concern that a faltering global recovery is threatening Asia.
Gross domestic product rose 3.42 percent in the three months through September from a year earlier, the statistics bureau said in Taipei today, revising its preliminary Oct. 31 estimate of 3.37 percent. The economy grew a revised 4.52 percent in the second quarter, the bureau said.
Nations from South Korea to Indonesia have cut interest rates or left them unchanged recently to aid domestic spending and counter risks from Europe’s debt crisis. Consumers in the U.S. pulled back on spending in October and a report yesterday showed manufacturing in China, Taiwan’s largest trading partner, may shrink this month by the most since March 2009.
“Manufacturing and exports have slowed significantly on the back of weakened global demand,” Katrina Ell, a Sydney- based economist at Moody’s Analytics Australia Pty Ltd., said before the release. “The gloomy global environment will weigh on private consumption in the export-oriented economy into 2012” and the central bank will probably leave rates unchanged at the quarterly policy meeting in December, she said.
The Taiex stock index has tumbled more than 23 percent this year, heading for its worst annual decline since 2008, according to data compiled by Bloomberg. The index rose 0.9 percent today. The Taiwan dollar declined 0.2 percent to NT$30.442 against the U.S. dollar at the 4 p.m. close, according to Taipei Forex Inc.
Taiwan’s central bank, which sets borrowing costs once every quarter, left its benchmark rate unchanged at 1.875 percent in September, snapping a series of five straight increases.
The statistics bureau today lowered its 2011 expansion forecast to 4.51 percent and said growth will be 4.19 percent next year. The government previously estimated a 4.56 percent expansion for 2011 and 4.38 percent growth in 2012.
The administration also lowered its projection for inflation this year to 1.37 percent from 1.51 percent, and forecasts consumer prices will rise 1.14 percent in 2012. They gained 0.96 percent last year.
Taiwan’s exports advanced 11.6 percent in the third quarter from a year earlier, compared with a 14.6 percent increase in the three months through June.
Slowing overseas shipments have hurt company sales and pushed the jobless rate higher for the first time in five months in October. Industrial production climbed 1.41 percent last month from a year earlier, the slowest pace in 26 months.
A total of 5,021 workers from 48 Taiwanese companies were asked to take leave without pay as of Nov. 15, Pan Shih-Wei, deputy minister at the Council of Labor Affairs, said last week.
Exports will probably climb 13.26 percent this year and 5.27 percent in 2012, the government said today. It previously expected overseas shipments to rise 13.18 percent in 2011 and 6.25 percent next year.
--With assistance from Ailing Tan in Singapore. Editors: Shamim Adam, Sunil Jagtiani
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