Taiwan sees hope for recovery
Updated: 2009-05-19 07:36
(HK Edition)
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TAIPEI: Taiwan's economy may show a year-on-year growth in the fourth quarter, said Council for Economic Planning and Development Chairman Chen Tiany-ji yesterday at an Executive Yuan meeting yesterday.
Pointing to a Wall Street survey last week which predicts the US to end its recession in August, Chen predicted Taiwan will recover either in the third quarter or the fourth quarter.
Every economic indicator shows that the economy has bottomed out or will bottom out soon, he declared.
The Wall Street Journal published the results of a survey of 52 economists May 14th. The consensus among them was that the US recession will end in August.
Chen's view pertaining to Taiwan is shared by economists polled by Reuters. Those surveyed predicted Taiwan's economic contraction could ease up, based on indications from the global economy that the worst may be over.
In the coming fourth quarter, it's likely for Taiwan's GDP to bounce back to growth. Unlike returns for the first three quarters, the bases for calculating fourth quarter results were lowered significantly because of the economic crisis.
Taiwan experienced its worst GDP fall in the fourth quarter - 8.3 percent - since the record began in 1962.
"If you look at the annual numbers, it seems that Taiwan's economy is faring much worse because of some exaggeration in the high-base we had last year," DBS economist Ma Tieying told Reuters.
"Fundamentally, we see some improvement in the overall economy, especially if you look at the quarter-on-quarter figures, with exports bottoming out and domestic consumption helped by the government's issuing shopping vouchers."
The government will announce its first-quarter GDP on Thursday. According to the Reuters poll of 12 economists, the economy may shrink by 9.2 percent year-on-year.
The estimate is not only worst in Taiwan's history but worse than some Asian economies sharing similar trade profiles, Reuters said.
South Korea's GDP contracted by an annual 4.3 percent and Hong Kong 7.8 percent. But Singapore may perform even worse than Taiwan, with its first-quarter GDP sliding 11.5 percent according to advance estimates.
As for Taiwan's GDP for the entire year, the estimates by the 12 economists polled by Reuters averaged 4.5 percent, worse than the government's February's prediction of 2.97 percent.
The global economic crisis crushed consumer demand for technology products such as laptops, mobile phones and digital music devices. That has caused Taiwan exports to crash starting with the final quarter of 2008.
Taiwan's technology firms, including Taiwan Semiconductor Manufacturing and Acer, will likely see shipments pick up during the second quarter as the tech sector leads an expected global recovery.
The government issued NT$83 billion ($2.44 billion) shopping vouchers early this year to its 23 million people in an effort to spur consumption.
China Daily/Agencies
(HK Edition 05/19/2009 page1)