Taiwan’s economy set to roar in 2010
• Publication Date：02/05/2010
As the global economy recovers from the financial tsunami, international and domestic forecasters have shifted from pessimism to optimism concerning Taiwan’s economic outlook this year. IHS Global Insight and a number of local think tanks now see the island’s economy powering ahead at 4 to 4.73 percent for 2010.
In support of this outlook are Taiwan’s overall economic monitoring indicators, which have been flashing “yellow-red” since November last year. The Cabinet-level Council for Economic Planning and Development expects January to improve to “red” on the back of rising monthly overtime figures for the industrial and services sectors, along with an increase in building permits and the stock price index. The return of export orders in December 2009 to levels equal to or better than prior to the global financial crisis is especially heartening.
While unemployment still hovers around 6 percent, job demand is expected to improve in the first quarter of 2010, with 25 percent of the island’s companies planning to increase hiring, a figure that puts Taiwan third in Asia and fourth in the world. The transportation, utilities and manufacturing industries also expect to employ more people, while the high-tech sector—where Taiwan’s core competitiveness lies—has recently announced large-scale recruitment plans.
Consumer confidence, another important indicator of economic trends, has now returned to pre-meltdown levels. Retail sector revenues for last year were up 1.56 percent, a turnaround from the drop experienced in 2008.
With consumer confidence on the rise, the local stock market benchmark index has surged over the past 12 months, up 78.34 percent from the end of 2008. Though it has seen some setbacks recently, analysts believe these are normal fluctuations and describe the market as having sound fundamentals.
Two factors have been key to Taiwan’s economic rebound. One is the Ma Ying-jeou administration’s mainland China policy, which puts political differences to one side and focuses on prosperity. This pragmatic approach has resulted in a flurry of new export orders from across the strait and delivered economic benefits to the people of Taiwan. Concluding the cross-strait economic cooperation framework agreement later this year will further build upon this progress.
The second factor is rising private consumption driven in part by government stimulus measures, including issuing consumer vouchers, offering full guarantees on bank deposits, slashing inheritance tax and providing subsidies for car purchases. It is also expected the economy will get a further boost when more of the “i-Taiwan 12 Projects” come on line.