Friday November 27, 4:09 AM
Taiwan economy contracts at slowest pace in a year
Taiwan's economy shrank 1.29 percent year-on-year in the third quarter, the government said Thursday, marking the slowest pace of contraction in a year.
The figure, reported by the Directorate General of Budget, Accounting and Statistics, was the clearest indication yet that the trade-dependent island was recovering from the global downturn.
"The figures are better than expected," said Shih Su-mei, head of the directorate general, who put the result down to a recovery in exports and private sector investment.
The third-quarter figure was the smallest contraction since the economy declined 1.05 percent in the third quarter of 2008.
In the three months to end-December, the economy was forecast to rise 6.89 percent from a year earlier, after five consecutive quarters of shrinkage, she said.
Shih told reporters the agency expected the economy to contract 2.53 percent in 2009, compared with the previous forecast of 4.04 percent.
"The economic recovery has been speeding up in the second half of the year," she said.
Taiwan's economy dropped 9.06 percent in the first quarter, followed by a 6.85 percent decline in the second, according to revised figures from the directorate general.
A sharp rise in Chinese tourists also helped boost the island's travel income and contributed to the improving data, according to the agency.
The number of mainland tourists to Taiwan increased nearly 500 percent to more than 400,000 in the first ten months of the year, the island's tourism bureau said earlier Thursday.
For 2010, the directorate general predicted the economy would grow 4.39 percent, without taking account of the possible positive impact from the signing of a major trade pact with China, she said.
Analysts said that international trade was a crucial factor in bringing about the improved situation.
"It's overwhelmingly because of exports, as the trade surplus has gone up by a big margin," said Alex Huang, an analyst at Mega International Investment Services.
"Judging from export orders, the fourth quarter is going to be even better," he said.
Taiwan, which relies on exports for about 70 percent of its economy, earlier this week reported export orders in October saw the first year-on-year increase in 13 months.
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