Taiwanese GDP outlook up on tempest rebuilding spending

08-21-2009 13:06

The statistics bureau of the Republic of China (Taiwan) increased its outlook for the nation’s gross domestic product, while the worldwide economy seems to improve. The statistics bureau stated that rebuilding spending after the worst typhoon in half a century could contribute to Taiwan’s economic recovery.

GDP outlook up

Taiwan’s gross domestic product will shrink 4.04% this year in comparison with the previous outlook of 4.25%, according to the statistics bureau. Officials commented that the decline may turn out less extensive if 50% of a scheduled storm rebuilding budget will be spent in 2009.

Contraction moderates

Tropical storm Morakot resulted in a historical amount of rainfall over Taiwan in the period between August 6 and 9. Morakot caused 153 people to die and 464 people missing as avalanches overwhelmed hamlets and devastated the Taiwanese infrastructure. The economies of China, Singapore and South Korea are growing, while the shrink of Taiwan’s economy is moderating due to improved exports, included Taiwan Semiconductor Manufacturing Company Limited. Sebastien Barbe, head of emerging-market strategy at Calyon, Crédit Agricole's investment banking entity, commented: “It seems that the Taiwanese economy has left its recession behind. It’s likely that the rebuilding activities after the typhoon could further improve the nation’s economy during the following months.”

Slump of 7.54%

The Taiwanese economy slumped 7.54% in the second quarter, while the first three months of this year showed a contraction of 10.13%, according to the statistics bureau yesterday. The island’s Dollar gained 0.2% to NT$32.91 against the US Dollar at 10:14 a.m. this Friday, reducing the decrease of this week to 0.1%, Taipei Forex Inc. reported.

Tempest rebuilding spending

Taiwan’s government authorized yesterday a rebuilding budget of NT$100 billion ($3 billion) for regions struck by Morakot. The gross domestic product will contract by 3.75% if the administration invests NT$50 billion in 2009, according to Shih Su-mei, chief statisticians and accountants at the government’s directorate general of budget accounting and statistics.

Exports fall 21.21%

Taiwan’s economy consists for more than 66% of exports, which dropped 21.21%, reported the statistics bureau. Imports could decline 28.05% in comparison with a previous outlook of 28.53%. Last Thursday, Taiwan announced that its present account surplus increased to $9.92 billion in the previous quarter while imports decreased.

Economic collaboration agreement

Flextronics, a contract electronics maker, announced on July 13 its plans to expand its workforce in Taiwan to over 1.500 at the end of 2009. Furthermore, the administration is unlocking industries to Chinese investments as it also urges for an economic collaboration agreement with the continent in order to stimulate economic expansion.