A global slowdown complicated by the credit crisis at major US and European banks prompted a local economic think tank yesterday to trim its GDP growth forecast this year for a second time to 3.82 percent.
The Chung-Hua Institution for Economic Research (CIER, 中經院), which advises the government on major policy issues, adjusted downward projected GDP growth from the 4.5 percent it estimated in July, Wang Lee-rong (王儷容), director of the institute’s Center for Economic Forecasting, told a media briefing.
In April, the research body put the figure at 4.67 percent after the nation posted robust growth of 6.25 percent in the first quarter. However, growth slid to 4.32 percent in the second quarter.
Wang attributed the downward shift to sustained international economic weakening that has dampened demand for consumer and communications products made by Taiwanese firms.
The stimulus package introduced by the government has yet to contribute to expansion of domestic demand as hoped, Wang said.
“GDP growth is likely to drop to 2.41 percent in the third quarter, dragged down by shrinking consumer spending and turmoil in the equities market,” Wang said. “We expect the economy to grow by 2.52 percent in the last quarter when the stimulus package starts to bear fruit.”
CIER researcher Peng Su-ling (彭素玲) said inflation was forecast to reach 3.73 percent this year, a figure that still causes concern, though the pressures have eased compared with the summer.
Peng said the local currency would trade at a yearly average of NT$31.06 against the greenback, up NT$1.78 from last year. She put the average exchange rate at NT$31.19 and NT$31.08 in the third and fourth quarters respectively.
Against this backdrop, Peng said it was unlikely the central bank would lower interest rates again this year.
“I believe the top duty of the monetary regulator is to fight inflation although it has shown keen concern for economic growth,” she said. “Chances are the central bank will adopt a neutral stance as consumer prices remain relatively high.”
CIER is more pessimistic about the economic outlook next year when growth is expected to slow to 3.34 percent and unemployment to rise to 3.94 percent.
Wang said the government should shift its attention from boosting exports to stimulating domestic demand to help the country better weather the global slowdown and credit crunch.
“There is little the government can do to stem the international financial tumult,” Wang said. “But it can take steps to encourage private investment and consumption — a campaign that promises better success.”
Hsu Chih-chiang (徐之強), an economics professor at National Central University, said past economic downturns averaged 16 months, with the exception of the 1982 energy crisis, which sank the world economy for 37 months.
A solid sign of economic recovery is for the leading cyclical indicators to gain points for four consecutive months, Hsu said, forecasting that the economy would touch bottom next July or August.
The institute’s revised GDP forecast was lower than the government’s forecast of 4.3 percent, the Taiwan Institute of Economic Research’s (台經院) 4.27 percent and Polaris Research Institute’s (寶華研究院) 4.1 percent.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
NO SHORTCUTS: Asked about Elon Musk’s Terafab initiative, TSMC CEO C.C. Wei said it takes two to three years to build a fab and another one to two to ramp it up Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its revenue growth forecast for this year to above 30 percent, up from the 25 percent it estimated three months earlier, citing extremely robust artificial intelligence (AI)-related chip demand. “Our customers and customers’ customers, who are mainly cloud service providers, continue to send us very positive signals and outlook,” TSMC chairman and CEO C.C. Wei (魏哲家) said at an earnings conference. The company also hiked its capital expenditure for this year toward the higher end of its forecast, or US$56 billion, as it aims to step up advanced chip capacity expansions, such as
The founder of Chinese property giant Evergrande Group (恆大集團) has pleaded guilty to charges of fraud and bribery, a court said yesterday, the latest blow for what was once the country’s leading developer. Evergrande’s rise was propelled by decades of rapid urbanization and rising living standards, but in 2020, its access to credit dramatically narrowed when the government introduced curbs on excessive borrowing and speculation. The company defaulted in 2021 after struggling to repay creditors. Founder Xu Jiayin (許家印), 67, known as Hui Ka Yan in Cantonese, was reportedly held by police in 2023, with Evergrande saying he had been subjected to
Taiwan is attracting a growing number of foreign jobseekers as companies increasingly recruit overseas talent to ease labor shortages and expand global reach, recruitment platform 104 Job Bank (104人力銀行) said yesterday. More than 40,000 foreign nationals searched for jobs in Taiwan through the platform last year, a 28 percent increase from a year earlier, the company said. Malaysians accounted for the largest share of overseas jobseekers at 12.2 percent, followed by Indonesians at 11.9 percent and Vietnamese at 10.8 percent. Indonesian applicants surged more than 50 percent year-on-year, while Vietnamese jobseekers rose by more than 30 percent. Applicants from the
RSS