Manufacturers turned slightly positive about the economy last month due to the peak export season, but most of them thought the economy will remain at its current level over the next six months, according to a poll released by the Taiwan Institute of Economic Research (TIER, 台經院) yesterday.
Export orders rose 22 percent last month from a year earlier to US$23.78 billion, the Ministry of Economic Affairs said on Monday.
The increasing exports pushed TIER's manufacturing climate index to 112.10 points last month, up by 1.11 points from the previous month, the report said.
For the next half year, 57.7 percent of respondents said they expect the economy to stay at its current level, up from 50.2 percent from the previous poll.
Manufacturers who think the economy will improve fell from 38.7 percent to 31.3 percent, while those who were pessimistic about the economic outlook declined slightly, from 11.1 percent to 11 percent.
The index, which measures the climate of the service sector that accounts for about 70 percent of GDP, however, declined by 2.37 points to 116.09 last month, which is attributed to rising consumer prices, the report said
Higher prices may result in inflation and force the central bank to raise interest rates again, according to TIER.
The central bank has lifted its benchmark interest rates five times since Oct. 1 of last year.
When the bank raised its rediscount rates by 125 basis points to 2.125 percent on Sept. 15, it said that inflation may exceed the government's 2 percent forecast for this year in the wake of heavy amounts of typhoon damage and higher oil prices.
As for the value of the New Taiwan dollar, the institute said the currency is relatively stable compared to other major Asian currencies and should remain stable in the short term.
The NT dollar has been under pressure to depreciate this year, as Taiwan's trade surplus has shrunk significantly, and the US dollar has strengthened, according to the report. It has also been hurt by the continued capital outflows and the stock market's weak performance.
For the first nine months of the year, Taiwan posted a trade surplus of US$1.94 billion, a 69.5 percent drop from the same period last year, according to government statistics.
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