Taiwan’s economy remains on the course of recovery this quarter, but its momentum might lose some steam as companies and consumers turn cautious about spending, the Germany-based Ifo Institute said last week.
The landscape looks fair for the next six months as ongoing global economic improvement might supply Taiwanese exporters with inventory demand for new technology devices ahead of year-end holidays, the institute said, although most constituent gauges in its latest survey lost points.
The score for the economic condition stood at 6.7, the lowest in six quarters — compared with 31.6 three months earlier — according to the institute’s poll of 1,123 experts from 121 nations.
The findings suggest experts are losing confidence about Taiwan’s economic scene, although they believe in a continued recovery in the near term.
“The pace of recovery is indeed wanting,” Wu Ming-huei (吳明蕙), a research director at the National Development Council, said on Thursday.
The council helped gather information for the Ifo survey.
The softening sentiment came even though the global economy achieved a much higher score of 12.7 this quarter, compared with 13 last quarter, Wu said.
Values above zero indicate positive sentiment while points below the neutral mark suggest pessimistic views.
Capital expenditure and private consumption gauges both read zero this quarter, from 21.1 and 5.3 three months earlier, the Ifo report said.
Local technology firms have refrained from active acquisition of capital equipment for the past three months, indicating that the need for capacity expansion is tapering off.
Exports and imports also weakened from 78.9 and 63.2 in the second quarter to 46.7 and 33.3 respectively, the survey said.
Consumer prices might climb higher in the coming six months, as well as interest rates for long-term and short-term financing, it said.
The survey also found that many experts expect the US dollar to appreciate against the New Taiwan dollar in the second half of the year, but the TAIEX might enter a correction cycle.
A weak NT dollar is favorable for local exporters, allowing them to boost competitiveness and book foreign-exchange gains when settling payments.
The Directorate-General of Budget, Accounting and Statistics is due to update its growth forecast on Friday after a preliminary report showed lower-than-expected growth of 2.14 percent for the second quarter.
For the whole of this year, GDP is forecast to grow 2.05 percent, the agency said in May.
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