No reason for panic, Taiwan’s economy is sound, Yang says

By Shih Hsiu-chuan  /  Staff Reporter

Fri, Aug 12, 2011 - Page 3

Executive Yuan spokesman Philip Yang (楊永明) yesterday presented economic indicators in an effort to defuse panic on Taiwan’s stock market amid an economic slowdown in the US and debt problems in the eurozone.

The fundamentals of the economy are sound and the public should keep faith although “Taiwan will surely go through short-term economic turmoil,” Yang said in response to queries at a press conference held following the weekly Cabinet meeting.

Yang said the issue was not discussed at the meeting, but related government agencies would continue to closely monitor changes in the economic situation.

Yang said that in the first and second quarters this year, listed companies reported a 4 percent increase in revenue compared with the same period last year, which was 20 percent year-on-year growth — evidence that these companies are all financially sound.

Taiwan’s stock market price-earnings ratio, computed by dividing the market price of one share of a stock by its per-share earnings to evaluate an equity investment, on Wednesday stood at 14.13, he added.

Yang said the government had forecast steady growth in external trade this month after outbound shipments surged 11.7 percent month-on-month and 17.6 percent year-on-year to US$28.12 billion last month, helping boost exports to US$182.26 billion in the first seven months — the strongest level ever.

As of the end of June, the country’s foreign exchange reserves increased to US$400.33 billion, still the fourth highest in the world, he said.

Taiwan would continue to see robust growth as its economic growth rate may reach 5.01 percent and GNP was expected to top US$20,000 this year, he said.

Yang said that the country’s consumer confidence index last month also showed signs of a steady recovery as it hit 86.84 points, marking a new high since 2001.

The government expects a total of NT$8 trillion (US$275.96 billion) in private consumption this year, the highest in seven years, and NT$2.2 trillion in private investment, the highest since 1966, both pivotal for economic growth, he said.

As for the unemployment rate, Yang said it stood at 4.35 percent in June, down from 6.13 percent in August 2009. In the first half of the year the nominal jobless rate averaged 4.45 percent, a drop of 1.02 percentage points from a year earlier.