Major foreign brokerage houses have cut their forecast for Taiwan’s economic growth next year in their latest reports in light of the increasing risks surrounding the European sovereign debt crisis and global growth more generally.
Goldman Sachs Group Inc on Thursday revised downward its forecast on Taiwan’s GDP growth for next year to 3 percent, from the 3.2 percent it predicted previously. The US brokerage house estimated growth of 4.4 percent for this year.
“The downward revision was in light of the recent revisions to our global growth forecasts, most notably in Europe,” Hong Kong-based Goldman Sachs economist Shirla Sum said in a report.
Goldman maintained a cautious stance on Taiwan’s growth outlook going into next year, saying the country was one of the most vulnerable in the region to an external slowdown.
In addition, with little room for monetary policy maneuvering and limited impact from further easing in the current downturn, Taiwan’s weakness could persist in the face of global headwinds, Sum said.
Against rising risks surrounding global growth and the European sovereign debt crisis, Goldman Sachs expected the central bank to cut rates by 25 basis points in the first half of next year and keep rates on hold for the rest of next year.
The latest reports issued by Morgan Stanley and UBS AG also indicated that Taiwan’s weakening exports could extend into next year, as external uncertainties continue to intensify.
“Taiwan’s exports are lacking strength in branding and have relatively high exposure to developed markets. The sluggish exports are causing businesses to cut back on capital expenditure already,” Morgan Stanley economist Sharon Lam (林琰) said in a report issued on Tuesday.
Morgan Stanley said a technical recession was likely in Taiwan in the second half of this year because the nation posted negative sequential growth in the third quarter and deteriorating external conditions may lead to negative growth in the fourth quarter.
Morgan Stanley revised down its forecast on Taiwan’s economic growth for next year to 3.1 percent, from the 3.6 percent previously forecast. It maintained a 4.2 percent growth forecast for this year.
On Wednesday, Swiss-based UBS AG cut its forecast on Taiwan’s GDP growth for next year to 1.5 percent, from the 2.7 percent growth estimated previously.
Council for Economic Planning and Development Vice Chairman Hu Chung-ying (胡仲英) said yesterday the country would not suffer a double-dip recession, after a UN report released on Thursday said that a double-dip recession was looming for Europe, Japan and the US.
Hu said only some European countries, such as Italy, Greece and Portugal, might face this predicament, because “they are still trapped in their plights.”
Additional reporting by CNA
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
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],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts