FACTBOX-Key facts about Taiwan's economy

Mon Oct 19, 2009 2:45am EDT

TAIPEI, Oct 19 (Reuters) - Taiwan President Ma Ying-jeou
was elected to a four-year term pledging to boost the economy,
which had been lagging some of its Asian peers for a decade or
so. The steep global downturn has so far derailed his plans to
ensure Taiwan's tech-reliant, export-driven economy increased
growth to 6 percent and cut the jobless rate to 3 percent. Here are key facts about Taiwan's economy:

ECONOMY

Taiwan's economy is likely to suffer its biggest
contraction on record this year following a slump in exports
due to the global financial crisis. But forecasts point to a
recovery next year as world trade picks up and government
stimulus boosts consumption. In a Reuters poll this month, economists forecast GDP would
fall in 2009 by 4.0 percent, steeper than some Asian peers such
as South Korea, Hong Kong and Singapore, but then rise 4.1 next
year. [ID:nSP523254] Taiwan mainly exports tech products and is home to the
world's top two contract chip makers TSMC (2330.TW: Quote, Profile, Research, Stock Buzz) (TSM.N: Quote, Profile, Research, Stock Buzz) and
UMC (2303.TW: Quote, Profile, Research, Stock Buzz) (UMC.N: Quote, Profile, Research, Stock Buzz). Its firms make 80 percent of the world's
laptops and 40 percent of its flat panel displays. Its top export destination is China, followed by the United
States.

PRICES

In the Reuters poll, economists expected consumer prices to
fall 0.7 percent this year and then rise 0.9 percent next year,
in line with government estimates. A 0.7 percent fall would be the weakest on records dating
back to the 1960s. Prices are falling largely as a result of a
sharp drop in oil prices this year compared with last year. Domestic consumption has been slack, but food prices
fluctuate during the typhoon season that lasts mainly from July
to October. Oil is key as Taiwan imports almost all of its
crude.

MONETARY POLICY

Taiwan's central bank cut rates seven times to a record low
of 1.25 percent between September and February to try to shield
the economy from the financial crisis. It has kept the rate unchanged since to support a recovery
now that the worst of the global crisis is considered over. Most analysts anticipate that the central bank will raise
rates in the second quarter of 2010, at the earliest, when
stronger signs of a global economic pick up are expected to
emerge. Taiwan keeps its Taiwan dollar TWD=TP in a managed float.
The currency has been rising against a broadly weak U.S.
dollar, so the central bank has been buying U.S. dollars to
help support exporters. Other Asian central banks have done the
same.

UNEMPLOYMENT

Taiwan's unemployment rate is a record high of 6.07
percent, double the level the president is aiming for.
[ID:nTPU001692] Key tech companies trimmed workforces and asked workers to
go on unpaid leave earlier this year due to the downturn. Last year, Taiwan's average jobless rate was 4.14 percent,
the statistics agency said. Taiwan has a workforce of 10.9
million, less than half the total population of 23 million.

(Reporting by Lee Chyen Yee; Editing by Neil Fullick)