Taiwan’s leading economic index, a pointer to the nation’s economic outlook six months ahead, shed 0.2 percent to record 117.6 points last month, indicating the economy is on track for a slight recovery, though the pace could slow down, the Council for Economic Planning and Development (CEPD) said yesterday.
All but one of the seven components making up the index registered negative cyclical movements last month from June, but remained in healthy zones, the council’s report showed.
“Although the global economy has showed signs of slowdown, the nation may continue to benefit from demand in emerging economies,” Hung Jui-bin (洪瑞彬), director-general of CEPD’s economic research department, told a media briefing.
Meanwhile, the government is helping to promote foreign and private investment, which will give a boost to consumer spending, Hung said.
The export orders, money supply, stock prices, producer inventories and building permit sub-indexes all headed down from their levels of a month earlier, the report said.
The semiconductor book-to-bill ratio, an indicator of the chipmaking industry’s performance, stood at 1.23 last month, above the healthy expansion level of 1.0, despite the downward movement, the report said.
Only the leading gauge of average monthly overtime in the industrial and services sectors registered an upward trend, the report said, as companies remained cautious about hiring new workers to meet demand.
The coincident index, which reflects the current economic situation, rose for a 13th consecutive month to reach 124 points, the report said.
Wu Ming-huei (吳明蕙), chief of the CEPD’s research division, said the readings lent support to cautious optimism about the nation’s economic outlook for the second half.
“The data helps to explain why major research institutes at home and abroad have revised up their GDP forecast for Taiwan this year,” Wu said.
On Aug. 19, the Directorate-General of Budget, Accounting and Statistics adjusted its GDP growth forecast to 8.24 percent for this year, up from 6.14 percent in May.
The forecast is higher than Polaris Research Institute’s (寶華綜合經濟研究院) estimate of 6.82 percent and Academia Sinica’s prediction of 6.89 percent for this year.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS