The nation’s long-term and short-term credit ratings will remain unchanged with a stable outlook, Fitch Ratings associate director Anna Thung said yesterday.
Fitch maintained an “A+” rating for Taiwan’s long-term foreign currency, “AA” for short-term foreign currency and “AA-” rating for long-term local currency, with a “stable outlook” for these ratings, the UK ratings agency said in a statement.
Fitch’s action came a day after Standard & Poor’s affirmed its “AA-” long-term and “A-1+” short-term ratings for Taiwan, citing easing political tensions across the Taiwan Strait helped by the results of the presidential and legislative elections on Saturday.
Fitch said its latest credit ratings profile for Taiwan is not restricted to the election itself, although the “geopolitical risks” associated with Taiwan’s relations with China have been factored into its credit consideration, it added.
“The affirmation of Taiwan’s ratings reflects Taiwan’s strong external finances and stabilization of its public finances,” Thung said in the statement.
According to the latest statistics from the central bank, the nation’s foreign exchange reserves totaled US$385.55 billion as of the end of last month, making Taiwan the world’s fourth-largest holder of foreign-exchange reserves behind China, Japan and Russia.
Fitch said it forecast Taiwan’s foreign exchange reserves would increase by nearly 15 percent to US$441.4 billion by the end of this year — which is equivalent to 14.7 months of current external payments cover or 38 percent of broad money supply.
Taiwan relies on sizable foreign-exchange reserves to protect the value of its own currency and to serve as a safety net in case of a financial crisis or market volatility as it is not a member of either the IMF or the World Bank and it cannot rely on these organizations or their member countries for financial aid.
“However, the uncertain global economic outlook poses risks to Taiwan’s small, open economy that could test the Taiwanese authorities’ commitment to fiscal prudence and put strains on the large banking system,” Thung said.
Fitch said it expects Taiwan’s GDP to grow 3.1 percent this year before returning to a normal track of 4.2 percent growth next year. As for the nation’s public finances, the agency expects the fiscal deficit to narrow to below 3 percent of GDP this year from 4.5 percent in 2009, thanks to the introduction of new taxes and the government’s self-restraint on public spending.
However, it remains to be seen whether fiscal stabilization will be sustained, particularly if the government reverts to stimulus measures in the event of sharp economic weakness this year, Fitch said.
In January last year, Fitch downgraded Taiwan’s long-term local-currency rating to “AA-” from “AA” on concerns about the nation’s increasing public debt and declining tax revenues amid government measures to boost the economy.
Moody’s still has yet to disclose its ratings outlook for Taiwan following the elections. The US ratings agency has an “Aa3” foreign and local currency sovereign rating for Taiwan with a “stable outlook.”
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