The National Development Council yesterday determined that the peak of Taiwan's 15th economic cycle will be January 2022, with an expansion period of 71 months, the second longest in history.


National Development Council: Contraction period may end in April

[Reporter Wu Xintian/Taipei Report] The National Development Council yesterday determined that the peak of Taiwan's fifteenth economic cycle will be January 2022. Counting from February 2016, the expansion period will last as long as 71 months. second longest.

And the current outlook is in a period of contraction, when will it bottom out?

The National Development Council stated that the estimate may be in April this year, but there are still many variables.

Gao Xiangui, vice chairman of the National Development Council, pointed out that the expansion period of the fifteenth economic cycle began in February 2016 and reached its peak in January 2022. It lasted for 71 months, ranking the first in history. The second long period is second only to the 96-month second expansion period of the economic cycle that began in September 1956.

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She analyzed three factors: first, the U.S.-China trade war and the return of Taiwanese businessmen to Taiwan during this period have significantly increased Taiwan’s investment rate and supported economic growth; The export performance of parts and components is very good; finally, due to Taiwan's proper epidemic prevention, production is almost uninterrupted, and it is able to maintain a good economic growth performance. In 2020, the economies of almost all countries will experience negative growth, and Taiwan will still be able to maintain two.

The economic growth rate of 98% ranks among the best in the world.

When will this contraction bottom out?

Gao Xiangui explained that in the past, the contraction period of the business cycle averaged 15 months. Starting from February 2022, April this year should be the bottom; however, the shape and length of each business cycle may not be the same, and we still need to observe related economic indicators.

Gao Xiangui pointed out that the situation this year is too unpredictable and changeable. Several indicators show that the second quarter may see the bottom of the economy. First of all, the contraction period of the past business cycle averaged 15 months, and it is estimated that the bottom will be in April this year.

Secondly, the concurrent indicators of the economic indicators in February are still down, indicating that the economic cycle is still in contraction, but the leading indicators have risen for three consecutive months, and the survey of the manufacturers of the business climate test points of the Taiwan Institute of Economics has rebounded for three consecutive months. The recovery of the Purchasing Managers Index (PMI) of the Institute of Economics, as well as related indicators and signals such as the GDP of the Comptroller General Office, have the opportunity to bottom out in the second quarter.

But Gao Xiangui also said that, including the monetary policies of the central banks of major countries, the speed and progress of China's economic recovery after the unblocking, geopolitics including the Ukraine-Russia war, the US-China confrontation, etc., there are still many variables to determine whether the second quarter will bottom out.

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