Economy ticks along at 5%

Bloomberg reports on good news for the incumbents and bad news for the KMT. The latter party is attempting to run on the economy, and a key part of that is attempting to convince the public that the economy is bad. At the moment, though, things are going pretty well as growth might well be topping 5 percent (in 2006 we did 4.6%). The economy still has many problems, but the export sector and reviving consumer demand appear to have plenty of firepower left...

Taiwan's economy probably grew at the fastest annual pace in almost two years as spending by consumers and companies made up for a drop in exports to the U.S.

Gross domestic product expanded 5.12 percent in the third quarter from a year earlier, according to the median estimate of 16 economists surveyed by Bloomberg News. That would outpace the second quarter's 5.07 percent increase. The report is due at 4:30 p.m. in Taipei today.

Manufacturers, led by AU Optronics Corp. and Hewlett- Packard Co., and banks including Standard Chartered Plc are expanding and hiring more workers, boosting household incomes and stoking consumer spending. Faster economic growth provides room for the central bank to raise interest rates next month.

``The cyclical recovery in consumer spending has helped cushion slowing external demand and is the key to our rather upbeat growth assessment for Taiwan this year,'' said Tony Phoo, an economist at Standard Chartered Bank in Taipei.

Phoo predicts the central bank will raise the island's benchmark rate to 3.375 percent in December from 3.25 percent.

The World Bank last week boosted its forecast for Taiwan's economic growth this year to 4.6 percent from an April estimate of 4.1 percent. Phoo expects a 4.7 percent expansion in 2007.

Taiwan's Taiex index has climbed 8 percent this year, compared with a 14 percent decline in Japan's Nikkei 225 Stock Average and a 1.5 percent gain in the Standard & Poor's 500 Index in the U.S.

Economic growth in the three months ended September 30 would mark a 17th consecutive quarter of expansion in Taiwan. A reading matching the median forecast would be the strongest since the 6.58 percent increase in the fourth quarter of 2005.

The looming recession in the US could curb growth here, but exports to China have boomed, tracking the high growth there (of course it's not 10% annually as the government claims, but if China as a whole is growing 6% or so, as analyses of its electricity consumption and other types of analyses show, that means that the coastal areas contain a population of 300 million or so who are growing at 15% a year...)

The article goes on to explain that companies are taking on extra workers to service orders for the coming quarter, keeping its low umemployment rate -- less than 4%, a rate many countries would kill for -- at a low level.

The numbers are favorable, and the DPP needs to get out there and talk about it, to counter the constant flow of propaganda from the Other Side. If the KMT chooses to run on the economy, let's bury them with it.

[Taiwan] [DPP] [KMT]