CEPD: Taiwan's tenth economic cycle appears to have ended

January 4, 2005

Taiwan, having experienced nine economic cycles from 1953 to 1998, appears to have reached the end of its tenth economic cycle, according to the Council for Economic Planning and Development's Economic Research Department. This tenth cycle peaked in September 2000 and bottomed out in September 2001. The cycle's period of expansion ran from December 1998 to September 2000, lasting 21 months, while its contraction phase persisted for twelve months from September 2000 to September 2001. This economic cycle completed its course in a total of 33 months.

Marking the beginning of its tenth economic cycle, Taiwan entered a period of recovery in 1999 as the effects of the Asian financial crisis of 1997-1998 were tapering off and the US economy continued its period of prosperity. Even the effects of the 921 Earthquake in September 1999 had only a limited influence on the tenth cycle's period of expansion. In the first three quarters of 2000, the global economy remained strong and Taiwan's exports and stock market were performing well. However, due to the bursting of the Internet economy bubble and rising oil prices, the global economy began a downturn in the fourth quarter of 2000. This worldwide economic turnaround took its toll, and Taiwan rated its first-ever economic indicator "blue light," signaling economic recession, in December 2000.

In 2001, the global economy continued its weak performance and Taiwan's domestic investment and consumption stagnated, while a series of typhoons and the 9-11 attacks in the US also took their toll. These factors presented Taiwan with its worst ever annual economic growth rate, -2.18%, and led to rising unemployment rates. Taiwan's economic indicator light remained blue for the entire year of 2001.

Once into 2002, the gradual world economic recovery boosted Taiwan's export figures. That year, Taiwan's economy grew by 3.59% and its gross domestic product returned to 2000 levels. The nation's economic indicator light turned green in April 2002.

(Central News Agency)

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