Two more foreign institutes have lowered their forecasts for the nation’s GDP growth on concerns that the global financial crisis is hitting its export-driven economy harder than expected.
The IMF and Standard Chartered Bank yesterday projected that the economy would shrink by 7.5 percent and 3.5 percent respectively this year, mainly because of a sharp decline in exports and private investment.
“The impact of the global crisis on economies in Asia has been surprisingly heavy,” the IMF said in its latest report on the global economic outlook.
Its forecast of a 7.5 percent contraction in Taiwan’s GDP growth would put the country behind South Korea and Hong Kong, but ahead of Singapore, which is expected to see a 10 percent contraction.
In January, the IMF estimated a contraction of 4 percent for Taiwan’s economy this year.
Standard Chartered Bank revised its projection to minus 3.5 percent growth from minus 1.5 percent three months ago.
“Taiwan’s economy remained depressed in the first quarter following a record 8.4 percent drop in the fourth quarter [of last year],” Tony Phoo (符銘財), the bank’s chief economist in Taipei, told a media briefing.
Phoo said grim data for the first three months had prompted the adjustment, adding that a recovery was unlikely until next year.
“Declines in exports, industrial output and capital-goods imports may have caused GDP to contract another 7.2 percent” in the first quarter, Phoo said.
Outbound shipments, a mainstay of the economy, are likely to drop 36 percent and 30 percent in the second and third quarters respectively, after falling 36.6 percent in the first quarter from the same period last year, the economist said.
He put the fourth-quarter decline at 6 percent.
Sagging private investment, another drag on the economy, is not expected to pick up any time soon because of the uncertain economic outlook, Phoo said.
But the worst of the down cycle is probably over and the recession will decelerate to 4.7 percent, 1.4 percent and 0.5 percent for the remaining three quarters, he said.
While the IMF projects zero growth for Taiwan next year, Standard Chartered predicted positive growth of 2.6 percent next year, boosted by trade with China.
“Warming cross-strait ties are starting to bear fruit, especially in the tourism and logistics sectors,” Standard Chartered said in a report yesterday. “The number of Chinese tourists applying to visit Taiwan reached the daily limit of [3,000] in April.”
If the number of Chinese visitors increases by 1 million per year, GDP could expand by 0.3 to 0.4 percentage points, not including induced effect, Phoo said.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last