With regard to private consumption, the slow growth in the domestic economy affected consumer confidence. The negative impact of lower equity prices and reduce work hours, it is estimated that the domestic annual growth rate of real private consumption will be adjusted downward from 3.38% in 2011 to 2.72% in 2012. Because of the negative effects of the international economic situation, business investment is expected to decline, as private investment. But with government efforts to increase investment and private participation in public construction to stimulate investment is expected to increase. Therefore, it is estimated that the annual growth of private investment will continue to grow steadily, reaching 1.91% in 2012 of -2.36% in 2011.
With regard to foreign trade, the European debt crisis still a negative impact on the global requirements, and therefore exports to China, Japan, and Europe fell in November 2011. But with more than 90% zero products ECFA early harvest list starting next year, the export momentum is expected to be larger. It is estimated that the annual growth of Taiwan of real goods and services exports will be 5.15% in 2012. Regarding the imports, because of the negative effects of the recession on business investment, the annual growth of real goods and services imports are expected to fall to 2.2%.
Regarding the price, with the slow growth in the global economy, the prices of international crude oil and raw materials declined. Meanwhile, as the European countries still tight fiscal policy to control the deficit, global demand is expected to decline, the expected inflation remains within reasonable limits. The annual growth rate for Consumer Price Index of Taiwan in 2012 is expected to decrease slightly from 1.35% to 1.16%. Moreover, the annual growth of the Wholesale Price Index expected to decrease from 4.25% to 2.35%. As for money, with sufficient domestic equity funds is the annual growth rate of monetary expansion is expected to grow steadily in 2012 with 5.98% of narrow money supply (M1B) and 5.24% of broad money (M2).
In short, the European debt crisis had a significant influence on the dynamics of foreign claims on Taiwan. Fortunately, the U.S. economy is expected to continue growing, albeit slowly and with the leading Chinese emerging economies in Asia will likely continue to perform relatively well in 2012. Taiwan is estimated that GDP growth will remain at 3.81% next year. Looking ahead, the credit problems of issuers of government bonds in Europe, the possibility of a hard landing for the Chinese economy, the fragile economic recovery in the U.S. and the uncertain situation in Iran is worth noting that in the near future. Is the expected errors and uncertainties into account that 50% of GDP forecast is between 2.07% and 5.64%.