Taiwan says ‘not pessimistic’ about economy as stocks swoon

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FILE PHOTO: A man looks at stock market monitors in Taiwan

TAIPEI – Taiwan’s Economy Ministry said on Tuesday it was cautious but “not pessimistic” about the island’s economic prospects in the second half of the year, pointing to strong exports, despite a swoon in share prices on its stock market.

After a strong performance through 2020 and 2021, Taiwan assets are being dumped as investors start to worry that rising interest rates around the world are going to hurt economic growth for the export-dependent island, a major producer of semiconductors.

The benchmark index has dropped 21% this year, completely unwinding 2021 gains. The currency has lost 7% on the dollar.

The ministry said in a statement that the global economic situation in the second half of the year does have “various variables” that need watching, but Taiwan industry’s fundamentals are good, as are exports.

“The Ministry of Economic Affairs maintains a cautious but not pessimistic view of Taiwan’s economic development in the second half of the year, which is not affected by short-term fluctuations in the stock market,” it added.

The ministry said both exports and export orders in May were positive and Taiwan’s chip industry is a world leader, which will help support growth.

Recent fluctuations in Taiwan’s stock market “are mainly affected by uncertainty in the international environment”, it added.

Taiwan releases preliminary second quarter economic growth data at the end of the month.

(Reporting by Ben Blanchard)