Over 3,700 Taiwanese factories closed in the eight months to August -- up 31 percent from a year earlier -- as the economy turned sharply for the worse, the Ministry of Economics Affairs said yesterday.
The number of factories shut down in the January-August period surged 885 year-on-year to 3,711, but the actual number of factories closing was likely greater because many firms had not registered with the government, the ministry said.
"More plants will be forced to shut down in the coming months as the export-driven economy is expected to deteriorate further in the face of steeper falls in US demand after the terrorist attacks," a ministry official said.
But the ministry official declined to predict whether the number of plant closures would reach 6,000 this year -- up from 5,000 last year -- as local media has reported.
Economic activity in Taiwan had already suffered its biggest quarterly contraction in 26 years of 2.35 percent year-on-year in the three months to June, according to the Directorate General of Budget, Accounting and Statistics.
Growth is expected to slow over the full year by 0.37 percent from an earlier Directorate General' estimate of 4.02 percent, the first annual contraction since measures of economic performance were introduced.
But unidentified sources at the Directorate General told a Chinese language newspaper earlier this week that the economy could contract more than 1 percent this year, with both the US tragedy and Typhoon Nari-related damage factored in.
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