Taiwan’s economy is expected to slow over the next six months, due to volatility in global equity markets and the escalating trade war between the US and China, German think tank the Ifo Institute said on Monday last week.
Ifo said in its latest quarterly World Economic Climate survey that the economic climate indicator in Taiwan fell to minus-42.1, its lowest level since the first quarter of 2012.
The slowdown reflected turbulence in global equity markets amid concerns over the trade war, Ifo said.
The survey indicated the sub-indices for exports, imports, capital formation and private consumption moving lower over the next six months.
The US dollar’s appreciation against the New Taiwan dollar is expected to boost consumer prices, it said, adding that interest rates could increase and, together with a tighter monetary policy, send equity prices lower.
Commenting on the survey, National Development Council research director Wu Ming-huei (吳明蕙) said volatility in global financial markets undermines confidence in the local economy, while there are concerns that Washington will impose tariffs on an additional US$267 billion of Chinese goods on top of the US$250 billion.
China last year exported about US$500 billion of goods to the US.
However, since the Taiwanese government is to speed up the pace of public work investment, capital formation is expected to grow, Wu said.
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