The nation's inflation rate this year may exceed the 2 percent target set by the government, should the average price for crude oil exceed US$85 for the year, a government official said yesterday.
Thomas Yeh (葉明峰), vice chairman of the Council for Economic Planning and Development (CEPD), made the warning after prices of crude futures hit a record US$100 per barrel on Wednesday.
"If average global oil prices exceed US$85, then the inflation rate target of 2 percent may not hold ... We calculated the target with the premise that crude oil prices remain around US$85 per barrel," Yeh said in a telephone interview.
In a separate interview, an official of the government's statistics department confirmed that the official forecast of a 1.84 percent inflation rate for this year made in November was based on the premise that crude oil prices would stabilize at around US$73.6 per barrel.
"Though volatile fluctuation of oil prices in the third and fourth quarter of 2007 exceeded our expectations, prestigious institutions such as the EIA and the IMF anticipate a slight but steady retreat on crude oil prices after the first quarter of 2008 because of a closing gap or even a surplus of supply for oil over demand," Tsai Yu-tai (
Tsai said that last year's inflation rate -- which is to be announced on Sunday -- is very likely to be adjusted upward due to higher-than-expected oil prices.
The inflation rate for last year was previously forecast at 1.65 percent in November.
The surprising spike in oil prices is largely due to speculation spurred by geopolitical incidents and is unlikely to be long-term, Yeh said.
He said the government is closely monitoring the trend and may adjust its policy on domestic oil prices only if the crude oil prices linger around US$100 for more than six months.
The US Energy Information Administration (EIA) forecast WTI crude oil prices at an average of US$84.83 per barrel this year.
Estimates by the IMF, Citigroup and Lehman Brothers were lower, ranging between US$75 and US$77.
Yeh, citing the EIA statistics released last month, said the demand for crude oil last year averaged 85.78 million barrels per day, while supply averaged 84.86 million.
The institution projected the average of demand and supply at 87.16 million and 87.16 million barrels a day this year, 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