July 2012  
What else can be done for recovery?
TIER cut forecast for the 2012 Taiwan GDP growth
Constrained by fiscal deficits, most advanced economies have had no choice but further ease their monetary policies lest the economic outlook should be unquestionably bleak. Central banks need to cut their already near to the ground interest rates simply because the economic conditions are gloomy and deteriorating. The slowdown of global economy has become widespread. What else can be done for recovery? The fact is decision makers of world primary and secondary economies are running out of feasible plans and sound measures. Taiwan is no exception with concerns about faltering internal and external demands continue.
Recently issued leading indicators of the US, Europe and Japan were all in downward sloping. The US and Japan strived to place themselves on the track of recovery; however the former has slowed down a bit and the latter has still been shrouded in the threat of deflation. Regarding Europe, the European troubles in fiscal slippage have turned into an endless nightmare. In addition, China seemed planning for an inevitable soft landing. As a result, weakening global demands have constrained Taiwan’s foreign trade. The total exports of USD 24.36 billion decreased by 6.6% in June over the previous month or dropped by 3.2% Year-on-Year. The imports of USD 21.79 billion decreased by 8.6% Month-on-Month or dropped by 8.4% over the same month of last year. Because the decline in imports was greater than the decline in exports, Taiwan still “enjoyed” a trade surplus for the first half of 2012. The cumulative trade surplus from January 1 till June 30, 2012 stood at USD 11.19 billion that would be 10.7% increase compared with the same period of 2011.
On the subject of the supply side, Taiwan Industrial production index decreased by 5.23% in June Month-on-Month, and the IP index stood at 128.59 points. Nevertheless, the IP index fell by 2.44% if it’s compared with the same month in 2011. Among sub categories, the manufacturing production fell by 2.31% Year-on-Year. The construction decreased by 10.11% Year-on-Year having the worst performance. The total industrial production from January to June reduced by 3.04% compared with the same period in 2011. Furthermore, the manufacturing production jumped down by 3.26% and the construction fell by 4.03% from January till June Year-on-Year.
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The Directorate General of Budget, Accounting and Statistics (DGBAS) cut GDP growth to 2.08%
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