| Abstract | After more than a year of adjustment, the economy is showing signs of improvement. Reflecting an improvement in sentiment as a result of rising property and stock prices, consumer spending and private investment showed signs of recovery in the first half of 1996. Exports were affected by weak demand in the industrial countries, the strength of the US dollar, changes in China's tax and investment policies, as well as military tensions across the Taiwan Straits. While a more favourable global economic environment and stable increase in income would bode well for economic growth in the second half of 1996, the gross domestic products (GDP) is only forecast to grow by 4.5% for 1996 as a whole. Inflation is expected to average 7%, reflecting moderate imported and domestically-generated price pressures. |
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