The slowdown in one of Asia's last high-growth economies is likely to become official on Friday with the announcement of the island's second-quarter gross domestic product growth.

Analysts and local media said the government was almost certain to roll back its forecast for full-year 1998 growth when it issues the figures at 0930 GMT.

Several local newspapers quoted unnamed government officials as saying Taiwan's 1998 GDP forecast would be lowered to around 5.5 per cent from 6.02 per cent previously.

It would be the second time the government has lowered its 1998 target. The state statistics bureau in May reduced its forecast to 6.02 per cent from 6.18 per cent.

Taiwan's growth forecasts are respectably high compared with most Asian economies -- many of which are mired in recession-- but a rise of "just" 5.5 per cent would be the island's lowest annual growth rate in nearly a decade.

Taiwan's GDP grew 6.81 per cent in 1997, 5.67 per cent in 1996, seen as a bad year, and 6.03 per cent in 1995.

A government forecaster said last week that second-quarter GDP growth would come in below the state's recent 5.78 per cent forecast but still "above five per cent".

An August 11 Reuters poll of economists predicted year-on-year 5.39 per cent GDP growth in the second quarter, saying Asia's recession had severely affected the island's exports and slowed private investment.

GDP grew 5.92 per cent in the first quarter following a blazing 7.08 per cent rise in the fourth quarter of 1997.

Analysts said the government had been over-confident in its assessment of Taiwan's economic fundamentals while underestimating the impact of Asia's financial turmoil.

Some economists nonetheless hailed Taiwan's ability to maintain one of the best growth rates in Asia.

"We have no reason to be pessimisticbecause Taiwan remains comparatively competitive in Asia and global economy," said Grand Cathay Securities economist Chang Jui-hsing.

"The second and third quarter economic growth likely will have reached the bottom and it should rebound in the fourth quarter and beyond," Chang said.

The government has stepped up efforts to bolster economic growth.

Local media said the cabinet's council for economic planning and development proposed in a closed-door meeting on Wednesday to pump in an additional T$200 billion (US$5.8 billion) in fiscal 1998-99 and fiscal 1999-2000 in infrastructure projects to expand domestic demand.

Taiwan's fiscal year starts from July and ends at June the next year.

The government had budgeted T$350 billion (US$10.1 billion) in fiscal 1998-99 for infrastructure projects.

The extra spending is expected to increase GDP growth in fiscal 1998-99 by 0.23 percentage points and by 0.59 percentage points in fiscal 1999-2000, local reports said.

The cabinet is expected to review theproposal in a cabinet meeting on August 20.