Taiwan’s economy recovering on first anniversary of financial crisis

As a consequence of the U.S. financial crisis, the global economy has become mired in recession and rising unemployment. To boost Taiwan’s economic growth and lessen the impact of international factors on its economy, the government last year implemented a series of measures aimed at fueling economic revitalization, including a program to boost investment in local infrastructure and expand domestic demand, and an economic stimulus plan.

This year, measures were adopted to distribute consumer vouchers, cut taxes, expand investment in public infrastructure projects and boost employment. At the end of March, consumption expenditures resulting from consumption revitalization measures amounted to NT$7.93 billion (about US$247 million). As of October 5, NT$54.56 billion (around US$1.7 billion) had been spent implementing the program to boost investment in local infrastructure and expand domestic demand.

According to a September 28th report by the cabinet-level Council for Economic Planning and Development (CEPD) for August, both leading and coincident indices posted steady gains over the preceding seven months. The leading index for August stood at 100, up 1.9 percent from July, while the coincident index rose 0.6 percent to reach 92.5. All the seven components – real customs-cleared exports, business electricity power consumption, real manufacturing sales, the industrial production index, as well as wholesale, retail and food and beverage industry revenues – showed an increase. The CEPD concludes that these developments indicate steady economic recovery and greater consumer confidence in Taiwan.

CEPD Minister Tsai Hsung-hsiung asserted that economic growth in Taiwan during the fourth quarter of this year will return to 5.49 percent. Next year, as the global economy recovers and the government accelerates implementation of its special public infrastructure construction budget, economic growth is expected to reach 3.92 percent, making Taiwan’s economic outlook cautiously optimistic.

The International Monetary Fund’s (IMF) recent World Economic Outlook report forecasted Taiwan’s gross domestic product to grow by 3.7 percent in 2010, ranking it second among the four Asian Tiger economies.

On September 29th, Bureau of Foreign Trade (BOFT) Director-General Huang Chih-peng also announced that Taiwan’s external trade totaled US$230 billion between January and August this year, accumulating a surplus of US$19.5 billion. This could result in a trade surplus of US$30 billion for the entire year and setting a new record.