10.29.2001
Indicators point to persisting recession

• Following sequential recovery from June to August, the composite index of leading indicators fell 0.9% MoM in Sept. The index of monitoring indicators continued to flash a blue light, indicating persisting recession. The Council for Economic Planning and Development, which compiles the index, says a recovery would be delayed until 3Q02. Our forecast calls for a protracted export-led recovery that won’t begin until 2H02. We forecast GDP will contract 2.5% in 2001 and grow 2.0% at best next year. A survey by the Taiwan Research Institute shows 84% of respondents expect the economy to deteriorate in the next six months.