Taiwan's economy remains on track of steady expansion

Taipei, Dec. 30, 2003 (CENS)--The monitoring indicator for Taiwan's economic performance flashed a healthy 'green light' for the fifth consecutive month in November, according to the Cabinet-level Council for Economic Planning and Development (CEPD).

In November, the composite score for the economic performance reached 29 points, down two points from a moth earlier. Hu Chung-ying, director of CEPD's economic research department, attributed last month's score drop to the slow growth in the manufacturing industry and the sluggish performance in both stock and sales markets.

During the month the indicator index of stock price and industrial production each dropped one point, together pushing the total score down by two points. The monitoring indicator for stock price therefore turned from "red" to "yellow-red" and industrial production from "yellow-red" to "green."

In November the leading economic indictor, which is designed to gauge the economic performance in the next three to six months, stood at 103.9 points (1996 = 100), edging up 0.1% from the preceding month and the highest since July 2000. Among the seven components constituting the leading indicator for the month, three of them presented a positive trend, including wholesale price index, exports, and money supply M1b.

Hu noted that due to global economic recovery, the export orders received by domestic manufacturers are increasing, thus economists foresee a rosy economic picture for the island for 2004. Chung-hua Institution for Economic Research predicted that the island's economic growth rate next year would reach 4.26%, while the Institute of Economics under Academia Sinica forecast the rate to be 4.35%. Both are higher than the growth rate of this year.

However, market observers said that Taiwan's economic performance in the coming year would be more or less influenced by the uncertain relationship with the other side of the Taiwan Strait, particularly after the presidential election slated to be held on March 20, 2004. And the future development of such epidemics as severe acute respiratory syndrome (SARS) and Bovine Spongiform Encephalopathy (BSE or mad cow disease) are also influential factors that can not be ignored.