June 2024  
Despite easing inflation, major central banks steer cautiously toward potential rate cuts
Taiwan's industries split on the economy: manufacturers wary, service sector less pessimistic
The European Central Bank has cut interest rates for the first time since 2019. However, the ECB's easing policy is expected to proceed more cautiously due to persistent service inflation, energy price pressures, and limited labor supply. Inflation in the US is cooling slowly, but the Fed continues to adjust both the timing and scale of potential rate cuts, suggesting that high interest rates may persist for an extended period.
In Taiwan's domestic manufacturing sector, despite ongoing business opportunities in emerging technologies and May's growth in export orders, production, and foreign trade for traditional industries compared to the previous month, leading to a positive shift in views for the current month. However, anticipated increasing oil and shipping prices, coupled with difficulties in passing on costs to clients, led to a negative shift in manufacturers' perception regarding the next six-month economic outlook. As the peak consumption season approaches, despite fewer consecutive holidays, travel intentions remain strong. Combined with the wealth effect created by the stock market, the consumption boom shows no signs of abating. Consequently, a significantly higher proportion of service industry operators are optimistic about economic performance over the next six months.
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No party gaining the legislative majority leads to competition in the quality of policies
No single party securing a majority in the legislature evokes historical parallels of divisions and alliances, though the modern aim is securing public support rather than conquest of the land. The Hotelling model of oligopolistic competition simplifies party dynamics. With only two parties vying, policy positions would converge, but three parties can lead to divergence and lack of consensus. The "one plus one" effect often falls short of two due to competition among three parties, making inter-party cooperation challenging. Within the Hotelling model, quality competition leads to convergence. However, in politics, party positions are not as straightforward as retail locations, prioritizing information warfare where disseminated information may not reflect genuine stances. To promote healthy competition, parties need to reduce mudslinging and false propaganda. Citizens must better differentiate genuine information and policy quality. Governments can develop discussion platforms and mechanisms to guide constructive quality competition. This not only improves policies but also allows the populace and parties to recognize differences are not as substantial as perceived, overcoming the lack of consensus from multi-party competition. (For more, please see the current monthly journal)

Food and beverage, retail sales continue to increase annually
Industrial production up for 3rd straight month in May
Taiwan Economic Research Monthly
Taiwan's Strategic Blueprint for a New Digital Society
Over the past 30 years, Taiwan's economic development and mastery of electronic technologies have established internationally competitive industrial chains. A "New Digital Society" is one of the government's development visions. In the digital age, "data" is the key element, and "software" is also very important. Whether Taiwan can grasp digital technology trends, accumulate data, and develop innovative software will be a crucial issue for industrial transformation and upgrading. Building on Taiwan's advanced hardware foundation, the government and businesses share the goal of combining AI, 5G, and the information and communications industry to maintain a leading international technological position. This month's featured articles will explore the legal foundation and talent development for Taiwan's digital advancement. It will also delve into the key digital transformation factors for the government, industry, and social organizations. By referring to international benchmarks, it will highlight the critical points for Taiwan to realize a "New Digital Society."
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