The Economic in Taiwan Essay Example | Topics and Well Written Essays - 2250 words

The Economic in mainland China - Essay ExampleAs a result, even in the best case scenario, economic produce in the region pass on suffer into the second half of 2003.The rising impact of SARS (in line with a rising flake of cases) on private consumption, coupled with a lower than expected climb in gross domestic product addition in the first quarter of 2003, has led us to reduce our forecast for economic growth in 2003 as a whole from 3.7% to 3.2%. A stronger recovery in both domestic and external look at depart result in gross domestic product growth of 5.4% in 2004.Taiwan is unlikely to face real inflationary pressures until late 2003 as domestic demand remains sluggish and worldwide inflationary trends have-to doe with to be benign. Entry to the World Trade Organisation (WTO) in January 2002 has reduced meaninged inflation and will continue to put downward pressure on prices in the forecast period. Following the US-led war in Iraq, prices on international oil markets ha ve eased. As a result, we expect the consumer price index to rise by an reasonable rate of only 0.3% year on year in 2003. Stronger domestic and international demand for goods and services are expected to revive price pressures in 2004, lifting inflation to an annual average of 1.4%.We expect the CBC to allow the currency to remain weak, mainly in order to maintain the scrap of Taiwans exports against those of Japan and South Korea. However, exports are unlikely to receive a major boost as a result, owing to general weakness in world demand, but the measure will help Taiwan producers to maintain market share. The CBC will allow the New Taiwan dollar to appreciate significantly only once there is sufficient evidence of a sustained recovery in GDP growth. Accordingly, in 2003 the currency will strengthen slightly in line with faster GDP growth late in the year, and as a result, average NT$34.79US$1. Once the recovery in GDP growth gains momentum in 2004, the currency will appreciat e further, to an annual average of NT$34.24US$1 in 2004.The rate of growth in merchandise exports in US dollar terms has retrieve since the second quarter of 2002. However, US demand-- the US is the destination for close to one-quarter of total exports--for Taiwans exports has remained weak since the beginning of 2003. In addition, some of the year-on-year growth in exports during 2002 reflected base effects of comparison with 2001, when Taiwans US dollar export cyberspace suffered double-digit declines. (Chu 79-104) The weak Taiwan dollar policy adopted by the CBC, mainly owing to the weakness of the Japanese yen, will not be enough to strengthen exports significantly. Nevertheless, exports to Asia, in particular China, will continue to abide some stimulus to the countrys external sector. Imports have also been rising since mid- 2002. This trend is likely to be break off by fragile domestic demand (not helped by SARS) and the loss of momentum in export growth, although import g rowth is still expected to outpace export growth in 2003-04. As a result, the