With the economy expanding by a stronger-than-expected 12.53 percent in the second quarter and a revised 13.71 percent growth in the first quarter, the central bank could raise interest rates in the second half to ease rising prices, economists said yesterday.
Cheng Cheng-mount (鄭貞茂), Citigroup Taiwan’s chief economist, said the central bank was likely to continue its close watch on still-high housing prices in the face of strong GDP growth but a benign inflation forecast.
“We believe the central bank will likely raise policy rates by another 12.5 basis points in September, but may switch to micro-prudential policy to cool housing prices instead of rate hikes, on concerns about increasing uncertainty in the global economic outlook,” Cheng said in a note.
The bank raised the benchmark rate by 12.5 basis points in June for the first time since 2008.
Cheng’s comment came after the government raised its GDP growth forecast for this year to 8.24 percent, from the 6.14 percent predicted in May.
Kevin Hsiao (蕭正義), head economist of UBS Wealth Management Research, also forecast an interest rate hike of 12.5 basis points.
“A rate hike of that scale is symbolic in nature, but the central bank would take steps to stabilize rising food costs,” Hsiao said.
The government yesterday forecast that inflation would rise 1.23 percent this year and 1.43 percent next year.
But Tine Olsen, a Sydney-based economist at Moody’s Economy.com, said in an e-mailed statement that weak private consumption could be a potential problem to ensure sustainable economic growth in the second half.
“Consumers are haunted by still-high unemployment and though the economy is adding jobs, it is not happening fast enough to absorb new entrants and the long queue of unemployed workers,” she wrote.
ADDITIONAL REPORTING BY CRYSTAL HSU
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”