Council for Economic Planning and Development (CEPD) Minister Christina Liu (劉憶如) said yesterday that despite rising concerns about the global economy, a double-dip global recession may not happen because of Asian emerging markets’ stronger economic fundamentals.
Liu’s remark came after the TAIEX tumbled 5.58 percent, or 464.14 points, to close at 7,853.13 yesterday, following Wall Street’s slide a day earlier on the growing bearish sentiment over the future economic outlook in the US and the eurozone debt crisis.
Liu attributed the US stock market’s tumble to investors’ worries about the middle to long-term US debt problem amid ongoing differences of opinion between the Democratic Party and the Republican Party.
As for the local stock market’s slump, which showed investors’ concerns about global financial turmoil, Liu said that investors should not be too worried because there may not be another global recession ahead.
“The current global economy is different from the situation in 2008, as the growing momentum in Asian emerging markets remains abundant,” Liu told a media briefing.
Liu said the economic fundamentals in Asian emerging markets remain strong because they are now more dependent on domestic demand rather than on exports to the US and Europe.
Therefore, even if the economies in the US and eurozone fall back into recession, Asian economies may be stronger, more resilient and be impacted less than in the financial tsunami of 2008, Liu said, adding that “the recession in the developed economies may also not occur.”
Liu remained optimistic on Taiwan’s economy, saying that growth would still top the region this year and stay above the 5 percent level as long as no other major global economic disasters happen.
Hu Sheng-cheng (胡勝正), a research fellow at Academia Sinica and a former CEPD minister, said the government would be likely to revise downward its forecast for economic growth this year to below 5 percent.
Citing recent economic data, Hu said the US and eurozone economies are not faring well, while the Japanese economy has been dampened by the earthquake and tsunami in March, as well as the recent drastic appreciation of the yen.
Worse still, China’s economy has also shown signs of a slowdown, despite Beijing’s relatively easy-going monetary policy, he added.
“All these factors could affect our export trade, which remains Taiwan’s key growth engine,” Hu said.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) revised downward its forecast for GDP growth this year to 5.01 percent, from 5.06 percent, at the end of last month. It is scheduled to release an updated forecast on Aug. 18.
Cheng Cheng-mount (鄭貞茂), chief economist at Citigroup in Taipei, said concerns over the turmoil on financial markets may weigh on the central bank’s decision to tighten monetary policy.
“The concerns over the global economic outlook may lead the bank to pause its monetary tightening measures earlier than expected,” Cheng said in a research report yesterday.
However, in the short term, Cheng said the central bank was still likely to raise rates at its board meeting next month because current rates are still accommodative and also behind the curve, compared with other Asian central banks.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
RSS