Many people are probably feeling a bit more upbeat about the economy this summer following the recent slew of positive data.
The GDP data released on Thursday last week indicated that the economy finished the April-to-June quarter in the strongest position of the past six quarters. According to the Directorate-General of Budget, Accounting and Statistics, the economy expanded 3.84 percent year-on-year in the second quarter, higher than the 3.14 percent growth recorded in the first quarter and better than the government’s original estimate of a 2.79 percent increase.
In addition, the index of economic monitoring indicators — a gauge of future development — rose last month for the fifth consecutive month, the National Development Council reported on Monday last week. The last time the index rose for five months in a row was from March to July 2011.
Meanwhile, the official purchasing managers’ index — a snapshot of manufacturing activity — expanded for the 17th straight month last month, signaling that manufacturers still have high expectations for growth over the next six months, while the consumer confidence index rose for the fourth consecutive month to hit a record high level, indicating the public is confident about the nation’s economic fundamentals in terms of stock market performance, household finances, durable goods purchases, consumer prices and job opportunities.
However, a major threat to the nation’s export-reliant economy in the second half of the year are the signs of weakening recovery in other parts of the world, especially in developed nations after the IMF recently reduced its global growth forecast from an increase of 3.7 to 3.4 percent against the rising geopolitical risks in Ukraine and the Middle East.
No wonder the index of leading economic indicators, which is used to check the nation’s short-term economic outlook, declined last month for the fourth consecutive month and several Taiwanese high-tech companies said over the past two weeks that they expected muted growth for this quarter.
Economic and business cycles have always been linked to sudden or substantial changes in global politics and economics, but the fluctuations in such cycles have become more volatile in recent years because the progress of any national economy is very much intertwined with those of other economies, so that sometimes one just cannot tell from economic data and forecasts whether the growth can be sustained or how bad the outlook is for the economy.
As a result, one must be mindful of the risk of a sudden fall in exports if electronic demand turns weak following new product launches as well as the potential reduction in investment, be it from the public sector or the private sector. That is because investment is a key driver of household employment, income and corporate profits, and also because investment is largely driven by the outlook for the global economy and the nation’s export cycle.
If there is one more far-reaching concern about the economy, it is the state of manufacturing industries, which have mostly relocated their major production overseas, meaning the share of domestic value added to their products per unit of output remains relatively low — thus providing limited room for wage and consumer purchase growth going forward.
While the gas pipeline explosions in Greater Kaohsiung will have limited impact on the economy, and GDP for this year might well expand by 3 percent from last year — the best performance in three years — it is still far below the growth rate of about 4 percent from before the global financial crisis in 2008, showing that Taiwan is becoming ever sensitive to exogenous demand shocks.
Two sets of economic data released last week by the Directorate-General of Budget, Accounting and Statistics (DGBAS) have drawn mixed reactions from the public: One on the nation’s economic performance in the first quarter of the year and the other on Taiwan’s household wealth distribution in 2021. GDP growth for the first quarter was faster than expected, at 6.51 percent year-on-year, an acceleration from the previous quarter’s 4.93 percent and higher than the agency’s February estimate of 5.92 percent. It was also the highest growth since the second quarter of 2021, when the economy expanded 8.07 percent, DGBAS data showed. The growth
In the intricate ballet of geopolitics, names signify more than mere identification: They embody history, culture and sovereignty. The recent decision by China to refer to Arunachal Pradesh as “Tsang Nan” or South Tibet, and to rename Tibet as “Xizang,” is a strategic move that extends beyond cartography into the realm of diplomatic signaling. This op-ed explores the implications of these actions and India’s potential response. Names are potent symbols in international relations, encapsulating the essence of a nation’s stance on territorial disputes. China’s choice to rename regions within Indian territory is not merely a linguistic exercise, but a symbolic assertion
More than seven months into the armed conflict in Gaza, the International Court of Justice ordered Israel to take “immediate and effective measures” to protect Palestinians in Gaza from the risk of genocide following a case brought by South Africa regarding Israel’s breaches of the 1948 Genocide Convention. The international community, including Amnesty International, called for an immediate ceasefire by all parties to prevent further loss of civilian lives and to ensure access to life-saving aid. Several protests have been organized around the world, including at the University of California Los Angeles (UCLA) and many other universities in the US.
Every day since Oct. 7 last year, the world has watched an unprecedented wave of violence rain down on Israel and the occupied Palestinian Territories — more than 200 days of constant suffering and death in Gaza with just a seven-day pause. Many of us in the American expatriate community in Taiwan have been watching this tragedy unfold in horror. We know we are implicated with every US-made “dumb” bomb dropped on a civilian target and by the diplomatic cover our government gives to the Israeli government, which has only gotten more extreme with such impunity. Meantime, multicultural coalitions of US