The nation’s economy may grow moderately this year, with no financial crisis expected to strike the global economy, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday, while revising upward its GDP growth forecast for this year to 3.63 percent.
That was compared with a 3.6 percent growth forecast the Taipei-based think tank made in December last year.
“The economy in Taiwan this year exhibits the traits of steady expansion,” CIER president Wu Chung-shu (吳中書) told a press conference.
The institute expects GDP in the first quarter to grow 3.28 percent from a year earlier — the slowest quarter of the year — followed by an acceleration in expansion quarter by quarter to 3.36 percent, 3.91 percent and 3.94 percent the rest of the year.
The think tank also forecast that the nation’s GDP growth next year would be 4.07 percent.
A strong rebound in private investment, which is expected to increase 5.62 percent from last year, would be the main driver for the nation’s economy this year, Wu said.
Private consumption would post 2.57 percent growth this year, with exports and imports expected to grow 5.25 percent and 5.03 percent respectively, the institute said in its report.
SinoPac Financial Holdings Co (永豐金控) chief economist Jack Huang (黃蔭基), who also attended the press conference, said no global financial crisis is expected this year, although the eurozone debt crisis remains worthy of scrutiny.
Inflationary pressures will not be an issue for this year either, Huang said, as the institute forecast a 1.6 percent rise in the consumer price index (CPI) this year, slowing from 1.93 percent last year.
However, inflationary pressures may resurface next year, after the government raises electricity prices in the fourth quarter of this year, Huang said.
Wu said the bombings in Boston in the US and the recent outbreak of H7N9 avian flu in China could impact Taiwan’s economy, but added that this would only be temporary and would not alter the nation’s improving economic outlook.
However, potential currency wars remain one major challenge for the global economy this year and the depreciation of major Asian currencies ahead may lead the central bank to appropriately cap the value of the New Taiwan (NT) dollar this year, said Liu Meng-chun (劉孟俊), director of the institute’s center for economic forecasting.
The NT dollar closed down NT$0.001 at NT$29.928 against the greenback in Taipei trading yesterday.
The institute forecast that the NT dollar would average NT$29.79 against its US counterpart this year, down from NT$29.62 last year.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
RSS