Taiwan's industrial production to recover in June

Taiwan's industrial production data for June due today. After seeing an exceptional decline in May, the country's industrial production (IP) is expected to recover part of its strength in this month. 

In May, the island's IP expanded by a mere 0.1% mom, the lowest growth rate seen since 1999. After seasonal adjustment, the outright declines in IP of more than 2% in two consecutive months were never seen before except during the two recessions in 2001 and 2008. External demand has been soft in recent months, but it was not as dreadful as in the previous recessions when the average pace of declines in export orders was 20% yoy. 

According to Societe Generale, "In other words, we believe IP growth in May was too weak to persist. However, given that there is an unfavourable base effect in June, IP is expected to have rebounded modestly to -1.1% yoy from -3.2% yoy in May. Still, IP growth will have declined sharply from 5.8% yoy in Q1 to -1% yoy in Q2, pointing to weaker Q2 GDP growth. Taiwan's GDP is expected to grow at 0.8% yoyin Q2 vs 3.4% yoy in Q1."