Presented by Michael Boyden.
With acknowledgment to our associates at IMA Asia for original analysis
The global economy is enjoying a synchronized upswing.
It looks likely that this year, for the 1st time since 2010, rich-world and developing economies will put on synchronized growth spurts. For six months or so there has been growing evidence of increased activity. It has been clearest in the export-oriented economies of Asia, but it is visible in Europe, in America and even, just, in hard-hit emerging markets like Russia and Brazil.
Will this be ‘continuous as the stars that shine”? It is not hard to imagine things that might yet derail the recovery.
China’s growing debt pile could still bring markets tumbling down, though there is a cast-iron consensus that nothing bad will be allowed to happen before the big Communist Party congress in the autumn. Populist victories in Europe’s various elections could bring about a crisis for the euro. Even if they do not, an end to the ECB’s bond-buying program, which has kept government borrowing costs at tolerable levels and even allowed a bit of fiscal stimulus to lift the economy, will lay bare the euro is still-unfixed structural problems. Or Mr. Trump might make good on the repeated threats he made in his campaign to raise import tariffs on countries he considers guilty of unfair trade, thus taking a decisive step away from globalization just as the world’s main economic blocs are at last starting to get into sync.
On the domestic economy side, the overall monitoring indicator flashed the “Green” signal for the seventh consecutive month in January 2017, reflecting the domestic economy continuing its recovery. According to the DGBAS’s latest estimate in February 2017, Taiwan’s 2017 GDP growth rate forecast has been revised upward, to 1.92%, mainly due to an expected improvement in exports outlook.
In order to create an environment conducive to industrial upgrading, the government will actively implement the 5+2 industrial innovation program, which is based on Taiwan’s advantages in the semiconductor industry. Meanwhile, the government is planning to expand public investment this year to promote forward-looking infrastructure, including:
- rail transport
- water environment
- green energy
- digital communication
- local urban and rural development.
These measures should help transform the industrial structure and accelerate Taiwan’s economic recovery.
- PMI : The manufacturing sector expanded for twelve consecutive months as the Taiwan Manufacturing PMI rose by 2.4 percentage points to 55.8 percent in February. The increase in new orders is the main reason to the higher PMI reading.
- NMI : It reversed its recent trend of growth and turned to contracting during February as the Taiwan NMI dropped 6 percentage points to 48.5 percent.