Taiwan sets 2.7% growth target for 2002

TAIPEI, Taiwan -- Taiwan's cabinet Wednesday set a 2002 economic growth target of 2.7 percent, after a recession this year that is likely to give the island its first full-year contraction.

This is a more optimistic outlook for 2002 than some analysts. Morgan Stanley's chief Asia economist Andy Xie said in a report Tuesday that Taiwan would likely grow about 1 percent next year, after a probable 2 percent contraction this year.

Xie's 2001 outlook is in line with the cabinet statistics agency, which last month cut its 2001 economic outlook to a contraction of 2.12 percent.

That would be the first full-year decline in gross domestic product for Taiwan.

The cabinet forecast GDP growth in 2002 would actually range between 1.61 percent and 3.08 percent, adding that unemployment of 4.5 percent and employment growth of 1.2 percent would be reasonable targets for next year, it said in a statement.

This was revised slightly from a 2.6 percent growth target and a 4.7 percent jobless target initially set by the cabinet's Council for Economic Planning and Development in late November.

Taiwan's jobless rate hit 5.33 percent in October, a record high for the sixth consecutive month, and was likely to hit a second consecutive full-year record of 4.5 percent in 2001, up from 2.99 percent in 2000.

Reuters contributed to this report.