| In 2005, due to the impacts of soaring international oil prices, the rampage of hurricanes in the U.S. and bird's flue, growth rate of the global economy slowed down, compared with 2004. According to the estimate of Global Insight Inc. in February 2006, the global economy grew 3.5% in 2005, down by 0.5 percentage points of 2004's 4%. In the first half of 2005, affected by slow down in the expansion of the global economy and run-up in international oil prices, the domestic economy had a lackluster performance. From the second half, along with the upturn in the global economy, output of the manufacturing industry gradually expanded and Taiwan's exports resumed strong growth. In addition, the government continued to implement major civil engineering projects. As a result, the business monitoring signal, issued by the Council for Economic Planning and Development, flashed a green light, representing a stable economy, for five months in a row, starting from August. Pace of economic development gradually stepped up and the growth rate for the whole year is estimated at 4.09%, lower than 2004's 6.07%. External demand surpassed the domestic demand to become the largest source of economic growth. Commodity and service exports grew 6.93% in real terms, and commodity and service imports advanced 2.22%, with the net external demand contributing 2.52 percentage points to the economic growth rate, accounting for over 60% of the growth. Private consumption advanced 3%, contributing1.75 percentage points to the economic growth. Domestic fixed capital formation inched up 0.46%, adding 0.09 percentage points to the growth. Aggregate domestic demand contributed 1.57 percentage points to the economic growth. Per capita GNP (gross national product) is estimated at US$15,676 for 2005, US$906 higher than 2004.
In 2006, the global economy and trade is expected to continue steady recovery. Global Insight Inc. forecast that the global economy will grow 3.5% in 2006, similar to the 2005 level. According to the forecast of the Directorate General of Budget, Accounting, and Statistics (DGBAS), under the Executive Yuan, in February 2006, Taiwan's economic growth rate will reach 4.25% in 2006. With improved employment and increased income, private consumption will chalk up a steady growth of 2.96%. Private fixed investments may slacken and is expected to grow only 2.38% in the year. With the steady expansion in the global economy and trade, Taiwan's external trade is expected to retain its growth momentum. Commodity exports and imports will grew 7.73% and 6.14%, respectively, and per capita GNP will hit US$16,208, US$532 higher than 2005. |
