Taiwanese economists downplay SARS threat

Economists at Academia Sinica yesterday said that the nation's first SARS patient is an isolated case, and would have only a limited impact on the economy."Despite the tumbling of stock prices [on Wednesday], the nation's first SARS case remains a one-time shock," Academic Sinica President Lee Yuan-tseh said yesterday at a press conference."SARS' impact on the economy won't be as great as it was in the second quarter, when we experienced the worst, and we have become well-prepared for a possible outbreak since," Lee said, urging the public to remain clam.Expressing a bullish view toward the nation's future economic performance, Wu Chung-shu, a research fellow with the research body's Institute of Economics, also agreed, saying the nation has had lots of well-established preventive measures to combat the disease.According to Wu, Academia Sinica yesterday shrugged off the latest SARS fears and revised upward its economic growth forecast for this year to 3.19 percent from the 2.65 percent it predicted in July."The local economy, coming out of the SARS outbreak in the second quarter, performed far better than expected in the second half of the year to bring up the yearly GDP figure," Wu said at the press conference yesterday morning.Last December, Academia Sinica forecast that this year's GDP would hit 3.31 percent, but later revised it downward to an estimated 2.65 percent after the SARS epidemic had knocked 1 percentage point off growth in the second quarter."Not only export and import performance, but also the nation's financial, trade and consumption performance continue to grow at a steady pace," Wu said.Wu noted that the nation's imports jumped by 16.56 percent and 29.85 percent respectively in August and November while imports of equipment grew respectively by 11.09 percent and 26.41 percent, signifying a solid recovery of economic confidence in investment and consumption.Next year's economy is expected to outperform this year's, with GDP growth at an estimated 4.35 percent next year, Wu said.Private investment, which contracted an estimated 0.23 percent this year, is expected to pick up next year to hit an estimated growth of 10.13 percent, Wu said."There may be a window of opportunity for deflationary pressures, as well as the jobless rate, to be alleviated mid-next year when the economic momentum solidifies," Wu said.The lingering threat of global terrorism, domestic political tensions, the future course of cross-strait trade, ineffective government investment and a possible SARS relapse all create an atmosphere of economic uncertainty, Wu added. Source: Taipei Times