Taiwan's gross domestic product (GDP) is likely to contract by 3.46 percent -- the worst in history -- in 2009, due to the prolonged recovery process of the global economy, the Academic Sinica forecasted Thursday. The projection, however, is more optimistic than the official projection of -4.25 percent, released on May 21 by the Directorate General of Budget, Accounting and Statistics. According to the Sinica's Institute of Economics, Taiwan is expected to gradually get out of the worst period for its economy later this year and move slowly toward recovery. While government investment will be the key to Taiwan's economic recovery, there are uncertainties such as international commodity and oil prices, recovery in the global economy, Taiwan's economic ties with China, and the development of the influenza A(H1N1) pandemic, the institute said. It predicted that in 2009, the real private consumption will likely post a 0.26 percent increase, reversing the negative growth of -0.3 percent recorded last year. However, with businesses' demand for equipment expansion remaining weak, the contraction in real private-sector investment is expected to widen from -13.28 percent in 2008 to -23.97 percent in 2009. The decline in exports of goods and services will deepen from -0.03 percent in 2008 to -13.97 percent in 2009, while the fall in imports will broaden from -3.98 percent in 2008 to -17.41 percent. The slowing commodity demand will be reflected in the wholesale price index, which is expected to drop by 7.46 percent in 2009. The consumer price index, meanwhile, is likely to decline 0.19 percent, the institute said. 