The nation's economic growth rate for this year may decline by up to 1.56 percentage points if the government fails to contain the spread of severe acute respiratory syndrome (SARS) in the first half of the year, an economic research group said yesterday.
"If the disease lingers on for a period of six months and isn't contained until mid-September, we may see a GDP rate of 1.98 percent this year," said Yu Min-chun (
She made the comments while presenting TIER's post-SARS economic forecast to a meeting of the Council of Economic Planning and Development in Taipei yesterday afternoon.
TIER previously estimated this year's GDP would hit 3.54 percent.
Presenting its forecast at the same meeting, the Chung-Hua Institution for Economic Research (CIER,
Both institutes, however, failed to calculate into the estimate the China factor, only saying that the local economy may be negatively impacted by Beijing's failure to quickly arrest the spread of SARS and boost China's economy.
"If the Chinese economy deteriorates, so does Taiwan's, since China has become the nation's second largest export market," TIER president Wu Rong-I (
Wu said China-based Taiwan-ese businesses may be even more vulnerable if they fail to adapt themselves quickly to the economic fallout there.
However, both Wu and Chou said that Taiwan may also benefit from the crisis in China.
"While the possible outflow of [export] orders from China is not clear now," Chou said. "If the orders are sent to Taiwan, our economy may actually benefit."
Wu also said that Taiwanese companies may begin to ponder the growing risks of doing business in China and divert part of their China-bound investments back to Taiwan.
If SARS is quickly contained by the end of June, Wu said that this year's GDP may be cut by only 0.57 percent to 3.02 percent.
"A total of NT$5.7 billion will be incurred in economic losses across all sectors including the manufacturing and service sectors," he said.
Wu Chung-shu (吳中書), a research fellow at Academia Sinica's Institute of Economics, agreed, saying the country may suffer a 0.58 percentage GDP cut if the disease doesn't stymie the third and fourth quarters' performance.
He warned that "it'll be difficult for Taiwan to maintain 3 percent economic growth this year," adding that "the local economy may slip into recession if the disease lasts more than two quarters."
Taking a more optimistic view, Chou said that the GDP may hold at 3.27 percent if the disease is contained by the end of June.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is