Thursday, February 23, 2012

Economy Slackening

Economic forecasts for 2012 were downgraded slightly....
Taiwan’s economy is forecast to grow 3.85 percent in 2012, down 0.06 of a percentage point from last month, as data showed local tech companies pulling back on investment.

Semiconductor, display panel and dynamic random-access memory firms will slim down investments in the coming months owing to a significant drop off in export orders, an official from the Directorate-General of Budget, Accounting and Statistics said Feb. 22.
The background is the general economic weakness. With Europe mired in crisis, the US government in the grip of mind-blowing economic and foreign policy irrationality, and weakening demand from China, Taiwan is buffeted by forces beyond its control. Earlier this month reports said that exports had fallen for the first time in two years....
Taiwan said Tuesday that exports in January fell for the first time in more than two years due to weakening demand for the island's signature electronics and telecom products.

Shipments fell 16.8 percent year-on-year to $21.08 billion -- the first contraction since a 4.6 percent decline in October 2009 -- and dropped 12.0 percent from December, according to the finance ministry.

Exports of information and telecom products shed 26.7 percent from a year earlier while electronics fell 23.2 percent year-on-year, the ministry said in a statement.

Exports to the island's major markets, including China, the United States, and Japan, all shrank from last year, with the biggest decline of 25.9 percent in shipments to China and Hong Kong to $7.57 billion.
Economic growth the last quarter was less than 2%. Interestingly, AFAIK no one has claimed that Ma would have won bigger but for that; evidently the Taiwanese were above seeing the election in terms of transient economic change. Note the huge drop in China shipments, a sure sign of economic fall-off there. It would be too easy to argue that Ma has put all Taiwan's eggs in the China basket and now look what happened, or to take another shot at ECFA for not giving us a boost, but diversification of exports is a trick when major markets like the US and Europe are in the doldrums. The DGBAS had originally predicted Oct-Dec would see 3.69% growth but actual growth was only 1.90%.

In other news, foreign investment was a hair under $5 billion in 2011, a 30% rise. In 2006 and through the first nine months of 2007, under the isolationist, business-hating Chen Shui-bian, foreign investment was $24 billion.
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