Taiwanese chief executive officers have grim views of the global and domestic economy this year, with exchange rate volatility, tax hikes and rapidly changing technology tastes, a survey by PricewaterhouseCoopers Taiwan (PwC Taiwan).
Thirty-six percent of chief executive officers surveyed expect the global economy to weaken this year, the highest since the company launched the survey in 2012, though 43 percent said they expect an extended “status quo,” the survey showed.
Only 16 percent said they expect an upturn.
Nineteen percent of respondents expressed confidence over revenue growth in the coming year, less than the global average of 35 percent this year and 33 percent last year, the survey showed.
“Taiwanese business leaders spot more risks than opportunities this year, with the gap widening to 20 percent,” PwC Taiwan chairman Dexter Chang (張明輝) said.
Exchange rate volatility tops the list of risks this year, weighing on 74 percent of chief executive officers, the survey showed, as the local currency deprecated to a six-year low of NT$33.808 against the US dollar on Feb. 3, but gained 4.22 percent to close at NT$32.382 in Taipei trading yesterday.
The advance makes Taiwan the best performer among Asian peers after the European Central Bank stepped up quantitative easing and the US Federal Reserve held policy rates unchanged last month, central bank Governor Perng Fai-nan (彭淮南) said.
Taxation policy uncertainty ranks second, with 65 percent of chief executive officers expressing concern over potential tax-rate hikes, the survey showed.
The incoming Democratic Progressive Party administration has floated ideas to increase inheritance and business tax rates to support the national pension fund and long-term healthcare for senior citizens.
“Policy stability and consistency are oftentimes more effective than low taxes in stimulating investment,” PwC Taiwan deputy chairman Steven Go (吳德豐) said.
Lengthy discussions over capital gains taxes on stock investments have depressed equity markets even after their institution and scrapping, he said.
Many chief executive officers said they are concerned about shifting technology trends and Taiwan’s persistent lack of talent, the survey showed.
More than 50 percent of chief executive officers said they believe the government should work with companies to groom talent to solve the problem, the survey showed.
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