Taiwan deputy fin min urges investors to stay calm as stocks fall
TAIPEI — Taiwan’s economic fundamentals are good and investors should remain calm and rational, and not panic, Deputy Finance Minister Frank Juan told Reuters on Friday after a large fall in share prices.
Taiwan’s benchmark stock index closed down 3.3%, making it the worst performing market in Asia on Friday. It is down 21% so far this year.
Juan said Taiwan’s economic fundamentals were good, especially its trade numbers and revenue figures for listed firms.
“The stock market fall today is a bit of an overreaction and a bit panicked. Please be calm, rational, and don’t panic,” he said.
“With the current economic situation, the stock market should not fall like this. Taiwan stocks today have fallen deeper than South Korea and the United States. It is mainly a psychological panic – the stock market should return to fundamentals.”
If there is a need, the National Stabilisation Fund can meet to discuss measures for the market, added Juan, who heads the fund that the government uses to intervene in the market if there is a large amount of volatility.
Policymakers have lowered Taiwan’s economic growth outlook for this year to less than 4%, after previously predicting it would grow more than 4%.
The trade-dependent island has been hit by global inflation, the war in Ukraine, snarled supply chains and falling demand for tech-related products.
Taiwan’s export orders, a bellwether for global technology demand due to the island’s key semiconductor industry, logged a strong annual rise in May, recovering from COVID-19 lockdowns in China and global supply chain disruptions, but the government has warned of global economic uncertainty ahead.
Juan said Taiwan was doing better economically than other parts of Asia.
“Although the economic growth rate has been slightly revised down, the Directorate General of Budget, Accounting and Statistics estimates the GDP growth rate this year will reach 3.91%, which is still very good.”
The statistics office made the prediction in late May, down from 4.42% growth forecast in February.
Preliminary second quarter GDP data will be released at the end of July. (Reporting by Liang-sa Loh; Writing by Ben Blanchard; Editing by Kim Coghill and Edmund Klamann)