Citibank Taiwan yesterday trimmed its GDP growth forecast for Taiwan next quarter by 20 basis points, saying the power outages in Japan could curb shipments of electronics products to Taiwan, its chief economist Cheng Cheng-mount (鄭貞茂) said yesterday.
The foreign lender now expects the Taiwanese economy to expand 4.2 percent in the April-to-June -period, from the 4.4 percent growth it predicted in December, after factoring in the high economic correlation between Taiwan and Japan.
“For every 1 percent drop in Japan’s GDP, Taiwan’s economy would slide 0.5 percent,” Cheng told a media briefing.
Japan, the key supplier of the world’s electronic components and materials, is Taiwan’s second-largest source of imports and its fourth-largest export destination.
Citigroup has downgraded Japan’s economic growth forecast for this year from 1.7 percent to 1.1 percent following the March 11 earthquake and the ensuing nuclear crisis, Cheng said.
However, reconstruction efforts should bolster demand and lift its GDP growth next year to 2.6 percent, Cheng said.
The global financial service provider’s previous forecast was a milder growth of 1.9 percent.
“It is difficult to measure the extent of the devastation and its impact on Taiwan at this stage,” he said. “It all depends on the pace of power supply recovery there. The longer it takes, the greater the damage it may exact on technology firms here.”
Uncertainty in Japan and turmoil in the Middle East prompted Citigroup to revise down its global GDP growth forecast by 10 basis points to 3.6 percent this year, Cheng said.
“All forecasts would have to be made anew if crude oil prices jump above US$120 a barrel,” he said.
West Texas Intermediate (WTI), a benchmark used by -Citibank crude oil prices for May delivery, traded at US$105.6 a barrel on Thursday.
Cheng expects oil prices to hover around similar levels for the rest of the year.
For the full year, however, Citibank kept its GDP growth forecast for Taiwan this year unchanged at 4.5 percent, as the economy expanded faster this quarter on robust consumer spending, offsetting the expected slowdown next quarter.
“We expect GDP to increase 4.6 percent in the first quarter, from our previous forecast of 4.1 -percent, thanks to strong consumption as retail and wholesales data show,” Cheng said.
Private consumption is expected to drive the economy this year, growing 4 percent from last year, while the government takes a back seat and reduces expenditure by 0.2 percent from the year-earlier level, the economist said.
The central bank will strike a balance between supporting the economy and containing inflationary pressures by raising interest rates by 12.5 basis points each quarter, starting on Thursday, Cheng 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
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
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