Standard Chartered PLC yesterday raised its forecast for GDP growth in Taiwan this year from 2 percent to 2.3 percent, with momentum expected to be stronger in the second half of the year.
While the pace of GDP growth could slow to 2 percent in the first half, expansion is likely to pick up in June as inventory levels normalize across industries, said Tony Phoo (符銘財), a Taipei-based economist at Standard Chartered Bank Taiwan Ltd (渣打國際商銀).
GDP expansion is to accelerate in the second half compared with the low comparison basis set last year, Phoo said.
An uptick in global growth, the annual expansion of which is predicted to increase from 3.7 percent to 3.9 percent, is expected to support GDP growth, he added.
In light of the faster expansion, the central bank is likely to hike its benchmark interest rate in June, he said, adding that the increase would be the first since 2011.
With the consumer price index this year expected to rise from 0.5 percent to 1.3 percent, conditions are ripe for the central bank to raise its rediscount rate from 1.375 percent to 1.75 percent through three hikes, he said.
Other economic metrics such as the unemployment rate and private consumption are expected to remain favorable, Phoo added.
However, the strengthening of the New Taiwan dollar against the US dollar has helped to ease any urgency for the central bank to raise interest rates soon, he said.
Phoo said he supported the government’s decision to appoint central bank Deputy Governor Yang Chin-long (楊金龍) to succeed bank Governor Perng Fai-nan (彭淮南) and said the move should help ease market uncertainty as it signals continuity in the bank’s monetary policy.
Perng is to retire later this month after nearly 20 years, Cabinet spokesman Hsu Kuo-yung (徐國勇) said at a news conference earlier in the day.
However, Standard Chartered warned that the biggest risk this year is complacency toward looming developments as quantitative easing policies by major central banks begin to take effect.
More important than the US Federal Reserve, which is not expected to raise its federal funds target rate to beyond 3 percent this year, is the possibility of the removal or tapering of aggressive stimulus by the European Central Bank and the Bank of Japan, which might lead to a more detrimental effect on market sentiments, said Ding Shuang (丁爽), the Hong Kong-based chief China economist at Standard Chartered.
Gogoro Inc (睿能創意) yesterday launched its first electric bicycle, the Gogoro Eeyo 1, in Taiwan, after unveiling the bike in New York in late May and in France on Tuesday. The company said it would also introduce the series in other European countries such as Germany and the Netherlands. The “Eeyo project” is the fourth of Gogoro’s eight projects that concentrate on smart transportation, which includes Gogoro’s electric scooter, battery swap system and electric scooter sharing service, company founder and chief executive officer Horace Luke (陸學森) told a media briefing in Taipei. “There are various types of city commuters. We will not
EXPERIMENTAL DRUG: While news about a COVID-19 vaccine is more eye-catching, developing a treatment would be more viable, the Senhwa boss said Senhwa Biosciences Inc (生華科) aims to raise NT$1.5 billion (US$50.57 million) by issuing 15 million new common shares in the third quarter of this year to fund the research of new drugs, including the experimental drug Silmitasertib for the treatment of COVID-19, the company said on Monday. That would be the firm’s largest fundraising effort after it raised more than NT$1.4 billion from an initial public offering on the Taipei Exchange (TPEX) in April 2017, chief financial officer Sarah Chang (張小萍) told the Taipei Times by telephone. The price of the new shares would depend on the firm’s average share price
NOT A PANACEA: Offering 5G services would not solve the problem of declining telecom incomes, chairman Sheih Chi-mau said, expecting a flat 5G telecom revenue Chunghwa Telecom Co (中華電信) yesterday became the nation’s first telecom to debut its 5G services, offering tiered tariffs that include a threshold of NT$599 and flat rates, as it aims to switch half of its subscribers to the 5G network within three years. Subscribers would have unlimited data transmission for monthly fees starting at NT$1,399 — the same flat rate as when the company launched its 4G service in 2014 — and they can subscribe to the highest-rate plan for NT$2,699 per month for faster data transmission speeds and larger bandwidth, the company said. Data transmission speeds would be within the range
STAYING AHEAD: TSMC expects its sales this year to grow 14 to 19 percent and could spend up to US$3.52 billion on research and development, leaving its rivals far behind Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) reported that the US last year approved 99 percent of its patent applications, which placed the tech giant among the top patent holders in the US. In its Corporate Social Responsibility Report, TSMC said it last year secured about 3,600 patents worldwide, including more than 2,300 in the US. As of the end of last year, TSMC owned more than 39,000 patents, the report said. The company last year filed almost 6,500 patent applications worldwide and ranked among the top 10 patent applicants in the US. In Taiwan, it was the largest patent applicant for the fourth