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Domestic demand remains strong in 2nd half.

Taipei, Oct. 25, 2011 (CENS)--Retail sales topped NT$305.2 billion in September and NT$2.7 trillion in the first three quarters, up 7% year-on-year, underscoring robust private consumption.

By contrast, the manufacturing output slackened in the month, when the manufacturing index reached 128.47, up 1.99%, the lowest growth in two years. It appears that despite the strong domestic demand, external demand is in decline.

Huang Chi-shih, chief statistician of the Ministry of Economic Affairs (MOEA), pointed out that Taiwan's economy was bolstered by both strong export and domestic demand in the first half but domestic demand may remain the major growth driver in the second half. The MOEA predicted that uncertainties in the external environment may dampen manufacturing output in the fourth quarter.

Uncertainties in external environment in the fourth quarter include decline in the global economy, strained economic and trade relations between China and the U.S., the implementation of the free trade agreement between South Korea and the European Union, the trend of the NT dollar's exchange rate, and the approaching of the Presidential election, as well as the high comparison base last year. The MOEA forecast that manufacturing output will slacken in the fourth quarter and rack up 5% growth only for the entire year.

Huang Chi-shih noted that while sluggish economic performance in the U.S. and Europe have dealt a major blow to export orders and manufacturing output, domestic demand remained strong. In the first nine months, retail sales of automobile/motorcycle and parts rose 17%, the highest, followed by storeless retails with 6.79% growth.
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Author:Liu, Philip
Publication:The Taiwan Economic News
Date:Oct 25, 2011
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