Asia is set to lead world growth this year despite risks to the regional and global economies from a possible war in the Middle East, terrorist attacks and Japan's weakness, a senior IMF official said yesterday.
The IMF has estimated global economic growth this year of 3.7 percent, up from the forecast for last year of 2.8 percent.
However, growth in most Asian economies should be higher than the global estimate, IMF external relations director Thomas Dawson said at a Foreign Correspondent's Club lunch here.
"Asia weathered the global slowdown better than other regions, and our expectation is that this year as well, growth in most of the Asian countries will be above the global average," Dawson said.
The IMF expects Asian industrialized economies, apart from Japan, to grow between 3.5 percent and 6 percent this year. The growth of the larger Southeast Asian economies is expected to average 4 percent.
"There does seem to be a bit of a disconnect in that the numbers seem to be better than what the attitude seems to be in the region and I'm a little bit curious about that," he said.
However, Dawson conceded that recent data suggest the global recovery is tepid and "downside risks appear to predominate."
"One concern is that the geopolitical situation will at some point force oil prices to catastrophic heights," he said.
Oil prices have already risen sharply as the US moves closer to a possible war against Iraq and the IMF estimates that every US$5 sustained rise in oil prices would cut 0.3 percentage points off global growth after about six months.
Another terrorist attack -- similar to October's Bali bombing -- would directly impact on industries such as tourism and lead to higher security costs. It would also weigh on investment decisions across many sectors, Dawson said.
Japan's persistently weak economy continues to act as a drag on Asia and the world and its government needs to move more decisively towards resolving its problems, he said.
"On the monetary policy side, more aggressive monetary easing by the Bank of Japan is needed to address deflationary pressures.
"But the benefit will be small unless the BoJ's actions are accompanied by broad economic restructuring of the banking and corporate sectors."
In the longer term, increasing intra-regional trade in Asia will eventually lead to less reliance on the major US, European and Japanese economies. The rise of China in international trade is an important step towards economic integration in the region.
Contrary to popular perceptions, China's trade gains have not been at the expense of Southeast Asia's emerging economies, he said.
"Instead, China and the ASEAN-four [Thailand, Indonesia, Malaysia and the Philippines] have together displaced the Asian industrialized countries in sectors -- such as apparel, footwear and household products -- that these more advanced economies were relinquishing.
"This is a healthy, rather than disturbing development," he said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to