Advanced and developing countries alike voiced worries over fragile global growth, eurozone stagnation and the swamp of excess monetary liquidity as the IMF and World Bank’s annual spring meetings started on Thursday.
Calls continued from multiple fronts for countries to ease harsh austerity programs to boost growth and, at the same time, for the world’s central bankers to be more cautious about feeding more money into the financial system, lest it spark new investment bubbles and an inflation outbreak.
IMF managing director Christine Lagarde expressed fresh concern over the “three-speed recovery” in the world’s largest economies — stagnating Europe and Japan, the sluggish US, and quicker-moving emerging economies.
Photo: Reuters
That the three groups of countries are moving at distinctly different speeds “is not the healthiest recovery that we could think of,” she said. “What we need is a full-speed global economy.”
The IMF meetings opened amid stress and frustration that, as the large economies still have not fully returned to growth after the 2008 financial crisis, small economies remained vulnerable to the continued turbulence.
Finger-pointing about excessive austerity and lack of support for demand, unmanageable capital flows stoked by central banks pumping out money, competitive devaluations, excessive sovereign debt and papered-over banking weaknesses were all in the open ahead of the meetings.
More than four years after the financial crisis battered the globe, “we’re still in the process of getting out of the crisis,” said Mexican Minister of Finance Luis Videgaray Caso, chairman of the G24 emerging and developing countries.
The G24 especially voiced concern about “the negative spillover effects on the emerging and developing countries of prolonged unconventional monetary policies.”
The G24 issued a joint communique on the sidelines of the IMF-World Bank meetings, urging the fund and the bank to step up efforts to achieve more coordinated global economic policymaking.
Still, Lagarde urged more stimulus for the short term, telling journalists that countries like Spain and the US could do well to pull back slightly from immediate efforts to shrink their budget deficits, and that the European Central Bank has room to cut interest rates to spur growth.
French Minister of Finance Pierre Moscovici said that sentiment to pull back from austerity in Europe was growing.
“Everyone understands now that adding austerity on top of recession would be a serious mistake,” he said.
Little concrete action on the big issues was expected from the IMF and World Bank sessions.
On the sidelines of the meetings on Thursday and yesterday, the finance ministers and central bankers of the G20 advanced economies were meeting on some key issues, including advancing efforts to rein in tax evasion and boost banking transparency around the world.
The G20 is expected to weigh endorsing a global effort to force banks to automatically share information with countries seeking to tax their nationals holding secret offshore accounts — an effort that could deal a blow to tax havens like the Cayman Islands, Hong Kong, Switzerland and others.
It remained unclear how far the G20 will go. At least the US and France are said to be hoping for a strong endorsement.
“A door toward the end of banking secrecy is open. It is something extremely important,” Moscovici said.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it would boost equipment capital expenditure by up to 16 percent for this year to cope with strong customer demand for artificial intelligence (AI) applications. Aside from AI, a growing demand for semiconductors used in the automotive and industrial sectors is to drive ASE’s capacity next year, the Kaohsiung-based company said. “We do see the disparity between AI and other general sectors, and that pretty much aligns the scenario in the first half of this year,” ASE chief operating officer Tien Wu (吳田玉) told an