Reports indicate bottom of slump is yet to come

Taiwan's economic planning body said yesterday that the nation's leading economic indicators for March hit a 15-year low.

The seven-point composite index -- announced by the Council for Economic Planning and Development -- functions as a gauge of economic health.

Six of the March indicators showed the economy continued to weaken in six areas: exports, wholesale prices, manufacturing orders, housing applications, money supply and average monthly working hours in the manufacturing sector. The seventh, stock prices, rose month-on-month, according to the report.

Without any clear light at the end of the tunnel, the council was less than optimistic about the economy in the short term.

"The chances of a recovery in the current quarter are almost non-existent," said the council's economic research director Hu Chung-ying (胡仲英). "There is a chance of an early recovery in the third quarter, but that would be a best-case scenario."

Adding fuel to the fire, the IMF forecast in its latest World Economic Outlook report that Taiwan's economic growth would continue southward.

Revised figures from the IMF show that Taiwan's economic growth will hover near 4.1 percent for 2001 and improve to 5.6 percent in 2002. And while Taiwan tries to deal with its own economic fallout, according to the Fund, there may be little the country or the region can do to escape the US' economic predicament.

The US economy is expected to stumble significantly this year to 1.5 percent growth and then to pick up slightly to 2.5 percent by 2002.

In a comparison of the "Asian Dragons," the IMF ranked Taiwan third in projected economic growth at 4.1 percent, behind Singapore's 5 percent and Hong Kong's 4.8 percent. South Korea was at the bottom of the listing at 3.5 percent.