Taiwan's export orders and industrial output increased in January from a year earlier, partly reflecting the start of a recovery in the global economy, the Ministry of Economic Affairs said yesterday.
Export orders rose 9.16 percent year-on-year in January to US$11.32 billion, the first rise since a string of declines from March 2001, the ministry said. But the figure was slightly lower from US$11.44 billion in December, it said.
The year-on-year surge in export orders reflected a gradual recovery of the global economy coupled with a lower comparative base, due to the Lunar New Year break falling in January last year, it said. The holiday fell in February this year.
Taiwan's industrial output in January was up 11.98 percent year-on-year, largely due to a lower comparative base last year and was up 0.38 percent from December, it said. The ministry expected export orders to record steady growth from March this year after a possible fall in February, said the ministry's statistics department director-general Chang Yaw-tzong (張耀聰).
Mild improvement would be seen in export orders and manufacturing output in the first half before a stronger recovery in the second half, Chang said.
"Export orders will continue to consolidate in the short run given the insufficient strength of the recovery, despite the positive impact of US interest rate cuts and tax reductions."
Gloomy economic prospects in Japan and trade in the European Union would be negative for trade of Asian products, he added.
Export orders received in January were higher than analysts' expectations and should further confirm the country's prospects for an uptrend in outbound shipments, National Investment Trust Co (建弘投信) economist Liu Yi-cheng said.
Liu said he was more optimistic about Taiwan's 2002 export outlook than the government.
"There should be a four, five percent increase in exports this year thanks to a favorable comparative base presented by 2001 as long as currency concerns are effectively removed."
Last week, the Directorate General of Budget, Accounting and Statistics predicted growth of just one percent in 2002 commodity exports, after a 17.1 percent decline last year.
But it was concerned exports could be negatively affected if the New Taiwan dollar's current disadvantage vis-a-vis the yen persists, he said, adding the local currency has actually appreciated by some 10 percent against the yen since December.
The currency gap would undermine outsourcing contracts from Japan and hurt the competitiveness of Taiwan products overseas, particularly in the US market, he said.
"I think it makes perfect sense that the central bank seems to have adopted a hands-off stance towards a weaker New Taiwan dollar since the foreign exchange market resumed trading after the Lunar New Year break" last week, Liu added.
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