Taiwan’s economy has been resilient this quarter and might show a modest improvement over the next six months, bucking a downward trend in the global economy, which has slumped to its worst performance since the global financial crisis of 2008, the Munich, Germany-based Ifo Institute for Economic Research said on Monday.
The latest findings for Taiwan ended five straight quarters of decline with a gain of 3.1 points this quarter, while readings for the world economic climate fell from minus-10.1 to minus-18.8.
The results showed that both assessments and expectations for the global economy have chilled significantly, with a deterioration in nearly all regions.
The downward trend is most prominent in Asia, as the region has been hit hard by ongoing trade frictions as well as geopolitical uncertainty, according to an institute poll of 1,230 economists worldwide, its quarterly report said.
The National Development Council (NDC) provided data on Taiwan’s performance.
“The global economy has slid to its weakest state since the global financial crisis, but might avoid a collapse in confidence this time around because of the slow pace of the decline on economic fronts,” NDC research director Wu Ming-huei (吳明蕙) said.
The global financial crisis, caused by systemic financial failures, swept quickly across the world, Wu said.
Taiwan’s export-reliant economy has held firm amid US-China trade tensions, thanks to some companies benefiting from order transfers and realignments in the electronics supply chain, the report said.
The overall score for the economy this quarter was zero, suggesting that the economists surveyed hold a neutral outlook — positive values indicate an optimistic outlook and negative values reflect a pessimistic outlook.
The reading for capital expenditure rose from 11.8 to 43.8, while private consumption eased from minus-23.5 to minus-6.3, the report said.
The economists expect the nation’s economy to recover to positive territory over the next six months, supported mainly by continued expansion in capital spending, with the index forecast to climb from 5.9 to 18.8.
However, the economists hold a dim outlook for exports and imports, expecting exports to contract to minus-25 and imports to minus-12.5, the report said.
Uncertainty over the US-China trade dispute accounted for weak sentiment on the part of local firms, Wu said.
Local companies in supply chains for international consumer technology products enter a low season between Christmas and the Lunar New Year.
The economists held a weak outlook for the US dollar against the New Taiwan dollar, following a series of interest rate cuts by the US Federal Reserve. An ongoing influx of money would lend support to the trend, they said.