With the sharp drop in the number of workers on furlough indicating a resurgence in economic activity, the central bank is unlikely to cut its policy rates when it meets next month, Barclays Capital said in a report yesterday.
The latest data released by the Council of Labor Affairs (CLA) on Thursday showed that the number of workers on unpaid leave was down 45 percent since the start of the year as a rash of orders boosted factory utilization.
As of Wednesday, a total of 6,959 workers from 73 companies remained on unpaid leave, down by almost half from the 13,034 reported at the end of last year, the data showed.
“We believe this is yet another sign of a near-term revival in -exports and industrial activity,” Barclays said in a research note.
The foreign brokerage house said it expected exports to rebound sharply this month, in part owing to a low base — the Lunar New Year holiday fell in February last year — but also because of a gradual recovery in real activity, in line with recent improvements in leading global indicators, particularly those for the electronics industry.
These positive signs lend support to its view that the central bank will keep its policy rates unchanged when it holds its quarterly board meeting next month, Barclays said.
Furthermore, the bank is likely to keep its policy rates unchanged over this year amid an improving global outlook and early signs of a bottoming out in the domestic economy, the brokerage said.
Separately, citing the latest World Economic Survey by the -Munich-based Ifo research -institute, the Council for Economic Planning and Development said on Thursday that the global economic climate rebounded this quarter, ending three straight quarters of decline.
The German institute’s quarterly survey, which polled 1,129 experts from 120 economies last month, showed that the world economic climate index — which included respondents’ evaluation of current economic conditions and sentiment over the next six months — climbed to 82.4 points in the first quarter, from 78.7 in the previous quarter.
Compared with the previous quarter, a higher number of respondents said they felt “bearish” about the current economy. However, more respondents also said their outlook toward the near future improved, the institute said in the report.
As for Taiwan, most respondents gave a “flat” assessment of the near-term outlook for the domestic economy, capital expenditure and private consumption, the report said.
Respondents who felt “bearish” about economic prospects in the next six months also dropped substantially, it said.