Business leaders yesterday urged high-ranking government officials not to underestimate economic shock of the SARS epidemic and "prepare for the worst."
"The government should set up a medium to long-term mechanism to deal with the disease should the SARS relapse in the winter," said Nelson Chang (
PHOTO: REUTERS
Lin reiterated the government's economic forecast yesterday, saying that this year's GDP may decline by 0.5 to 0.8 percent if SARS is successfully contained by next month.
However, if the disease continues to effect the economy in the third quarter, this year's GDP may drop another 1.3 percent to 1.5 percent to hit only 2 percent, he said.
Last Friday the Directorate General of Budget, Accounting and Statistics revised this year's GDP prediction downward from the 3.68 percent it predicted in February to 2.89 percent.
Although exports grew by 5.6 percent and imports by 7 percent last month, Lin said that "the growth of exports is likely to turn negative in May."
Douglas Hsu (徐旭東), chairman of Far Eastern Group, also warned the government of deflation, saying its negative impact on the economy could go "beyond imagination."
"If consumption is not boosted soon, Taiwan may go into deflation, which will serious damage the economy," Hsu said.
He urged the government to adopt fiscal policies to boost consumption, including tax-cuts.
Former economics minister Wang Chih-kang (王志剛) said that the SARS outbreak has tarnished the nation's international image and brought about social disorder, both of which will harm long-term economic development.
Huang Mao-hsiung (黃茂雄), chairman of the Chinese National Association of Industry and Commerce (工商協進會), who hosted yesterday's luncheon, urged the public to have confidence in the government's anti-SARS measures.
But he went on to say that "some small-sized hospitals, travel agencies and department stores may not survive the economic plight triggered by SARS."
A Hong Kong-based economist at Morgan Stanley & Co, Andy Xie (謝國忠), said SARS has a greater-than-expected shock on society although its impact on the economy remains a short-term phenomenon.
"The disease has brought about much institutional weakness among Asian countries that need to be addressed soon," Xie said.
The institutional weakness includes reduced national tax revenues, the lack of national-level contingency plans to deal with the epidemic and lower investments in the health-care system.
Following the widening of the SARS outbreak here late last month, Morgan Stanley yesterday revised its GDP forecast for Taiwan -- downward.
GDP is like to grow only 2 percent, down from 2.3 percent projected previously, Xie said.
The disease is expected to slow down the nation's China-bound investments, but the US investment bank believes that a continuous open policy and improvement in China's administrative efficiency and financial structure will, in the long run, offset the short-term impact of SARS, Morgan Stanley said in a report.
Goldman Sachs also cut Tai-wan's GDP to 3.3 percent to its earlier forecast of 3.9 percent yesterday, without taking the recent SARS surge into consideration.
Goldman Sachs said that it may further revise downward the nation's GDP figure in a week.
"Due to the latest development of SARS [in Taiwan,] we do see downside pressure," Goldman Sachs spokeswoman Mei Zhang (張東梅) said yesterday.
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