Print

Mail

wiki links

Number Three -- The Economy

By Richard Dobson
STAFF REPORTER
Sunday, Dec 30, 2001, Page 4

Demonstrators protest rising unemployment on Labor Day. TAIPEI TIMES FILE PHOTO

It's been gloom and doom for Taiwan's economy this year, with record unemployment and tumbling exports sending the country into its deepest recession since the 1970s.

The economy contracted 4.2 percent in the third quarter from a year earlier, with unemployment rising for 10 straight months to a peak of 5.33 in October, before falling slightly to 5.28 percent in November.

The manufacturing sector laid off 158,000 workers in the year to September. The electric and electronics industry, in which 61,000 jobs were lost, was the hardest hit.

Dampened demand for high-tech goods in the US -- Taiwan's largest market for tech exports -- amid the global downturn forced companies to move more of their operations offshore, primarily to China.

The government expects exports to fall 16.7 percent and imports to decline 23 percent this year from last.

For the first 10 months of the year, Taiwan sold US$28.4 billion in goods and services to the US, compared with US$33.9 billion in the same period a year before.

Imports have also suffered, with industrial and agricultural raw-material imports falling 42.3 percent and imports of capital equipment declining 57.8 percent year-on-year in November. Falling domestic and overseas demand had already forced 14,500 factories to suspend operations by the end of November. The number of newly registered plants through November dropped 34.4 percent to 3,429 as investment plans were scaled back.

Projections for GDP growth this year have tumbled, with most think tanks forecasting a contraction. Only Academia Sinica predicts positive growth of 2.38 percent.

One of the lowest forecasts came from the Directorate General of Budget, Accounting and Statistics, which estimated that GDP would contract 2.12 percent.

The Chunghwa Institute of Economic Research forecasts a contraction of 1.96 percent, and investment bank Goldman Sachs estimates a contraction of 1.8 percent.
This story has been viewed 1914 times.