Saturday, December 11, 2010

The state of the Taiwanese economy: The perception "on the ground"

l  According to a recent study conducted by the National Central University (NCU), Taiwan’s consumer confidence index (CCI) came in at 81.66 in November, which was the sixth consecutive monthly increase and the highest in six years.

l  Respondents to the NCU study were particularly optimistic in the categories of “employment prospects” and “overall economic outlook” in the next six months, providing the much-needed psychological boost to Taiwan's ongoing economic expansion.

l  The NCU study results also suggested that private spending and investment will continue to increase and become one of the engines of economic growth for Taiwan in 2011.

l  However, respondents were apparently “neutral” towards the purchase of durable goods in the next six months. The consecutive interest rate increases—once each in June and September—by Taiwan’s Central Bank were identified as being largely responsible for the conservative view towards the purchases of durable goods.

l  The increases in CCI could mean the “perception on the ground” is improving as most of Taiwan’s economic and trade numbers continued to show a sustained recovery. With the metropolitan elections now over, the sense of uncertainty once permeated the market is quickly dissipating.

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