The Taiwan Institute of Economic Research (TIER) has released new figures showing generally poor economic performance in Taiwan during August.
TIER’s monthly business climate index for August came out at 90.38 points, a fall of 1.39 points from July. It is the lowest monthly index since October 2012.
The index for the service sector saw an especially big decline. The service sector lost 4.64 points, finishing at 83.73 points. It is the lowest the index has fallen since February 2009.
Only the construction industry saw gains. The construction index logged its third consecutive month of growth with a slight increase of 1.25 points. Analysts believe this is due to damage caused by Typhoon Soudelor early in the month.
Director of TIER’s economic forecasting center Gordon Sun said Friday that the financial and retail sectors were hurt by trouble on Taiwan’s stock market in August. Falling stock prices eventually required the intervention of the National Stabilization Fund.
Sun said that the poor performance of the manufacturing sector in the second quarter has been matched by a declining service sector in the third.
TIER President, Dr. Lin Chien-fu, says that it is difficult to be optimistic about Taiwan’s economic outlook for the second half of the year. According to Lin, a weakening Chinese economy will have a particularly noticeable impact on Taiwan.
Lin also said that a possible US Federal Reserve interest rate hike at the end of the year and Chinese plans to allow wider currency fluctuation will harm Taiwan’s stock and Forex markets.