08.23.2001
More bad news on production front

• Development: Export orders declined 16.8% YoY and 3.6% MoM to US$10.8bn in July, resulting in 8.6% YtD contraction. Electronics orders declined 36.2% YoY.

• Analysis: Actual exports contracted 28% YoY in July, causing a 10.4% fall in the industrial production index. YtD industrial production has already shrunk 6.9%.

• Primasia View: We forecast a 15% YoY contraction in 2001 exports will continue to hold back GDP growth. We have revised our full-year GDP figures to a decline of 1.8%. We predict GDP will decline 3% in 3Q01 and 0.9% in 4Q01. Real interest rates need to contract and the NT$ is likely to depreciate moderately in the short term.