TAIPEI: Taiwan's exports hit a 10-month high in August, an indication that the export-dependent economy is gradually recovering after suffering a deep slump caused by reduced global demand for Taiwan's computer and electronics products.

Taiwan exported $19.01 billion worth of goods in August, about 10 percent higher than in July but 24.6 percent less than in August 2008, when the island set a record monthly high for exports at $25.2 billion.

The 24.6 percent year-on-year decline, though high, was the second smallest monthly contraction over the past nine months, and if exports continue to rise to $20 billion in September, trade will have recovered to normal levels, said Chen Tain-jy, chairman of the Council for Economic Planning and Development.

"I'm pretty sure the economy is recovering," Chen said.

He cautioned businesses, however, that some of the government's measures launched in 2008 to counter the global economic downturn would soon expire.

Yang Chia-yan, the director of the Taiwan Institute of Economic Research's Division VI, said Taiwan's exports have been helped largely by recovering demand in the United States.

Yang predicted that if the US economy continues to improve, year-on-year declines in monthly exports should narrow and could show positive growth in November or December.

Another positive trend, Yang said, was Taiwan's $2.3 billion in capital goods imports in August, the highest in the past 10 months and the third straight month that the figure has exceeded $2 billion, indications that investment is gradually regaining momentum.

Polaris Research Institute President Liang Kuo-yuan also expressed optimism that the economy was pulling out of its slump, saying that the August export figures were better than expected.

Liang suggested that if global demand remained stable, Taiwan's economy could return to the level attained in the first half of 2008, earlier than previously expected.

Higher exports in the traditionally strong fourth quarter could also help drive positive economic growth in the final three months of the year, Liang said.

China Daily/CNA

(HK Edition 09/09/2009 page2)