The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday cut its GDP growth forecast for the nation this year from the 3.96 percent it forecast in January to 3.48 percent, citing weaker-than--expected growth in the first quarter.
The government’s decision to raise gasoline and diesel prices this month, as well as increase electricity rates next month, also made the institute raise its growth forecast for inflation to 1.98 percent, up 0.52 percentage points from the January forecast of 1.46 percent.
The Taipei-based think tank’s latest forecast for economic growth was the lowest among all domestic economic research institutes and its growth forecast for inflation is the highest.
“Although the global economy has been resurging in the first quarter, the momentum was weaker than expected, leading us to revise down the full-year GDP growth forecast for Taiwan,” Gordon Sun (孫明德), deputy director of the institute’s macroeconomic forecasting center, told a press conference.
The institute revised downward its forecast for first-quarter economic expansion to 0.98 percent, from the 2.78 percent estimated previously, citing lower-than-expected exports and investments during the January-to-March period.
For the remaining quarters of this year, GDP is expected to grow 2.04 percent year-on-year in the second quarter, 4.57 percent in the third quarter and 6.07 percent in the final quarter, the institute said in a report.
Rising uncertainties about consumer prices, led by the looming rise in energy prices, also made the institute cut its growth forecast, Sun said.
Other than affecting economic growth and raising inflationary pressure, the hike in energy prices might further slow private consumption momentum, TIER president David Hong (洪德生) said.
The institute cut its forecast for full-year growth of private consumption to 2.51 percent, down 0.45 percentage points from its previous estimate.
The institute forecast the nation’s output to grow 2.11 percent this year, and input to fall 1.49 percent from a year earlier, the report said. It also forecast private investment to rise 0.66 percent this year.
Separately, a TIER survey showed business climate indicators for the manufacturing and -service sectors last month rebounded for the third consecutive month, indicating business sentiment continued to recover.
However, only 32.8 percent of the respondents expected business to pick up in the next six months, a sharp decline from the 45.7 percent recorded in a survey conducted in February.
The new survey confirmed that the recovery of the global economy made manufacturers feel more optimistic last month, Hong said.
However, uncertainties ,-including the return of the eurozone’s debt crisis and rising operating costs led by inflation, made them keep a relatively cautious outlook on the near future, Hong added.
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
A Bollywood actor’s face tattooed on his arm, Sandeep Bacche’s devotion shocks few in India where stars enjoy semi-divine status, but even there the hallowed silver screen might be losing its shine to streaming services and pandemic fears. “Whenever things get better and theaters begin operations, I will watch three movies a day for sure just as a way to celebrate,” said the Mumbai rickshaw driver, who is recovering from the virus himself. However, others might not join the party. With cinemas shut for months due to a COVID-19 lockdown, and little prospect they will reopen soon, frustrated Bollywood producers have turned to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, is to issue NT$13.9 billion (US$469.5 million) in unsecured bonds to help fund its plan to expand production capacity, it said on Friday. In a Taiwan Stock Exchange filing, TSMC said the bonds would comprise three tranches: NT$5.7 billion payable over five years, NT$6.3 billion over seven years and NT$1.9 billion over 10 years. The interest rates would be 0.58 percent on the five-year bonds, 0.65 percent on the seven-year ones and 0.67 percent on the 10-year tranche, TSMC said. Capital Securities Corp (群益金鼎證券) is to serve as the main underwriter in