The Chung-Hua Institution for Economic Research (CIER, 中經院) yesterday revised upward its economic growth forecast for this year to nearly 5 percent, making it the highest estimate among all local economic think tanks.
With the global economy picking up momentum and steady growth in the nation’s exports and imports, the Taipei-based institute expected the economy to rise 4.99 percent this year. Its prior forecast, made in December, was 4.66 percent.
Wang Lee-rong (王儷容), director of the institute’s Center for Economic Forecasting, attributed the upward adjustment of the GDP forecast for this year chiefly to a forecast two-digit rebound in domestic investment in the second half of this year.
“Taiwan’s economic growth momentum is shifting to internal demand in the second half of the year, with domestic investment expected to rise 10.96 percent, marking the second highest increase since 1992,” Wang told a media briefing.
GDP growth projections for this year by other local think tanks include Taiwan Institute of Economic Research’s (台經院) 4.81 percent, Academia Sinica’s 4.73, Polaris Research Institute’s (寶華經濟研究院) 4.72 percent and Taiwan Research Institute’s (台綜院) 4.45 percent.
Wang said given a higher comparison base from the second quarter of last year, quarterly economic growth would see a downward trend.
CIER predicted the economy would grow 9.27 percent in the first quarter, 6.55 percent in the second quarter, 4.01 percent in the third quarter and 1.08 percent in the final quarter.
Asked for comments on the draft industrial innovation act (產業創新條例) to lower the business income tax rate to 17 percent, Wang said the tax cut would increase public debt and force the government to reduce expenses for public construction, which could derail the economic recovery.
She described the proposed tax reduction as “adding insult to injury,” referring to the soaring national debt.
If the legislature approves the measure, “GDP growth forecast for this year would be revised downward to 4.08 percent,” she said.
CIER was less optimistic about the domestic labor market, forecasting that unemployment would remain as high as 5.5 percent this year. That contrasts with the Cabinet’s goal of reducing unemployment to below 5 percent by the end of this year.
Consumer prices are forecast to grow moderately, with inflation rising 1.71 percent this year and 1.76 percent next year, CIER said.
The NT dollar is expected to continue its recent appreciation against the US dollar given its strong link to the Chinese yuan, Wang said, adding that mounting international pressure on the yuan to revalue would prompt the NT dollar to appreciate.
“But China has many policy instruments in dealing with its exchange rates, so the Chinese currency is unlikely to skyrocket,” she said.
The yuan’s appreciation would not get “out of control,” she said.
CIER predicted that the NT dollar would average around NT$31.29 against the greenback this year, up 5.35 percent from a year ago, when the local currency traded at NT$33.06 on average.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
INVEST IN TAIWAN: A metal components casting firm and the world’s largest maker of aluminum bicycle rims also obtained approvals to join the program Solar Applied Materials Technology Co (SOLAR, 光洋應用材料), a part of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) “green supply chain,” has pledged to invest NT$1 billion (US$34.1 million) to build a new plant at the Tainan Technology Industrial Park (台南科技工業區), the Ministry of Economic Affairs said yesterday. SOLAR has been collaborating with TSMC to extract precious metals from waste and reuse them as “sputtering target” material in high-end semiconductor manufacturing, a TSMC press release issued in May said. Established in 1978, SOLAR also offers key materials and integrated services to customers in the optoelectronics, information and communications technology, petrochemicals and consumer electronics industries,
‘SWARM TECH’: Joint venture FARobot is to develop autonomous mobile robots that would first be deployed in Hon Hai’s factories to optimize production efficiency Hon Hai Precision Industry Co (鴻海精密) and Adlink Technology Inc (凌華科技) have formed a robotic venture that aims to use “swarm technology” to create robots that can communicate with one another on the factory floor to optimize production efficiency. Hon Hai is Apple Inc’s leading iPhone assembler and the world’s largest contract electronics maker, while Adlink supplies industrial computers and Internet of Things solutions. Through a subsidiary, Hyield Venture Capital Co (鴻揚創投), Hon Hai holds a 51 percent stake in autonomous mobile robot (AMR) developer FARobot (法博智能移動), while Adlink owns the remaining 49 percent. Together, the two companies put up NT$200