The Taiwan Research Institute (TRI, 台灣綜合研究院) yesterday slashed its GDP growth forecast for this year to 2.52 percent, from the 4.02 percent it estimated in December last year, following on economic downturn in the second quarter.
However, the central bank might keep policy interest rates unchanged at a board meeting on Thursday next week because the nation’s policy rates have been relatively low for a long time, the institute said.
The think tank’s forecast was lower than the 3.03 percent growth forecast issued by the Directorate-General of Budget, Accounting and Statistics last month.
The TRI was the second domestic institute to cut its forecast for Taiwan’s economy this year to less than 3 percent. Last week, Cathay Financial Holding Co’s (國泰金控) research team revised its GDP growth forecast for this year to 2.45 percent, from the 3.73 percent it estimated in March.
TRI president Wu Tsai-yi (吳再益) blamed worse-than-expected economic conditions in the second quarter for the downward revision.
“Most of the institutes expected Taiwan’s economy to bottom out in the first quarter, but various economic indicators have shown it bottoming out in the second quarter,” Wu told a media briefing.
The institute forecast economic growth to fall 0.18 percent from a year earlier in the second quarter — the lowest level this year — and to rebound to 3.75 and 5.81 percent in the third and fourth quarters respectively.
Wu described external and internal fundamentals as “cold,” with sluggish exports in the first five months impacting domestic consumption and investment.
The export sector may expand 2.05 percent this year, with private consumption and private investment expected to post 1.92 percent and minus-0.16 percent growth respectively, the institute said in a report.
The institute said it expects headline inflation to grow 1.93 percent this year, lower than the critical mark of 2 percent set by the central bank.
The central bank might not cut its policy interest rates at a board meeting next week because of economic uncertainties, Wu said, adding that decreasing rates would not be likely to improve investment because the current interest rate is already low.
Wu said the central bank might choose to allow the New Taiwan dollar to decrease in value over the near term to spur exports.
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