Taiwan economy will improve, says Ifo Institute
Taiwan's economy will likely improve in six months, according to Germany-based Ifo Institute, but the research firm remained cautious about the current economic conditions.
After interviewing economic experts, Ifo said that the momentum of Taiwan's exports, which are the backbone of the country's economy, and its imports are expected to pick up in six months to give a boost to the island's economic fundamentals.
In response to the Ifo comments, the National Development Council (NDC), the top economic planning agency in Taiwan, said that the research report was conducted in July, when the scale of Taiwanese exports' year-on-year decline for June had shown signs of moderating.
In July, Taiwan's outbound sales improved further with the export value growing 1.2 percent from the same month a year earlier to US$24.12 billion, ending 17 consecutive months of year-on-year decline. In June, the country's exports fell 2.1 percent from a year earlier, moderating from a 9.6 percent drop seen in May.
The NDC said that due to an improving export performance, Taiwan's economy could grow at a pace of 1 percent this year. Such an upbeat forecast represented a contrast to several economic think tanks' previous estimates, which pointed to a less than 1 percent increase this year.
The Ifo report said that with the economy expected to strengthen in six months, local inflation could climb.
Meanwhile, the German institute said that the New Taiwan dollar could depreciate against the U.S. dollar at a time when local interest rates have been on a path of decline. ■