Taiwan’s economy is likely to hold steady this quarter on the back of a favorable global landscape, but the outlook for private investment and consumption is dull, the Germany-based Ifo Institute said in its latest quarterly World Economic Survey.
The Munich-based institute arrived at the observations for the first quarter of this year after surveying 1,199 experts in 120 nations.
The confidence gauge for the global economic climate rose from 17.1 to 26 quarter-on-quarter, the highest in more than 10 years and the fifth consecutive increase, according to the survey released on Wednesday last week.
The rosy view might extend into the first half of the year with the six-month outlook gauge printing 23.9, up from 16.9 three months earlier, the survey said.
Economic improvement abroad is favorable to the nation’s export-focused economy, although the private sector is still conservative about capital equipment spending, the survey said.
Experts hold an overall neutral view about the nation’s current economy, with the reading kept at zero, suggesting an equal number of positive and negative opinions, it said.
That is because more experts hold a dim view about private investment and fewer people are upbeat about private consumption, the survey said.
Capital equipment imports by Taiwanese semiconductor firms have been in negative territory since May last year, following a year of active purchases to maintain their technology leadership on the world stage, it said.
Government officials and economists expect private investment to improve noticeably this year, driven by rapidly growing artificial intelligence and Internet of Things applications, it showed.
The emerging technologies are expected to offset the slowdown in smartphone sales as demand for mobile devices becomes increasingly satiated, analysts said.
Taiwan is home to the world’s largest contract chipmakers and chip designers as well as suppliers of camera lenses, casings, tough panels and other critical components used by smartphone brands.
Six months from now, the economy is likely to show positive cyclical movements on the back of better exports, imports, capital spending and private consumption, the survey cited experts as saying.
Inflationary pressures might increase while long and short-term interest rates might rise, the survey said.
Global central banks are expected to take cues from the US Federal Reserve and normalize their monetary policies this year, while most experts bet that Taiwan might keep its current monetary policy to support GDP growth, it said.
Against this backdrop, the chances that the US dollar will rise against the New Taiwan dollar are higher than three months earlier, the survey said.
A weak NT dollar is favorable to local exporters, boosting pricing competitiveness and allowing them to book foreign-exchange gains when settling payments.
In addition, local shares might tumble further after corrections earlier this month, trailing global equity markets, the survey said.
Concerns over monetary tightening heightened after US economic barometers fared better than expected, rocking global markets.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for
RSS