The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday cut its growth forecast for this year as global uncertainty heightens, posing a risk to the nation’s export-oriented economy.
The nation’s economy is forecast to expand 2.27 percent this year, down from the 2.41 percent the agency predicted in November last year, as sales of smartphones and other electronics products disappoint.
Taiwan is home to the world’s largest suppliers of chips, camera lenses, casings, battery packs, touchpanels and other critical components used in smartphones, laptops, TVs and other technology products.
“The economy is losing steam, but not in a recessionary state,” DGBAS Minister Chu Tzer-ming (朱澤民) told a news conference.
The ongoing tariff dispute between the US and China poses the biggest downside risk, while monetary normalization moves by global central banks and financial market volatility might also weigh on growth, Chu said.
Exports are expected to edge up 0.19 percent this year after contracting in the first half and rebounding in the fall when global technology brands launch new-generation devices, the DGBAS said in a report.
Imports are forecast to decline 0.95 percent this year, dragged by soft oil and raw material prices, as well as tepid demand for capital equipment, it said.
“Poor [order] visibility has led companies to turn cautious about capacity upgrade or expansion,” the minister said.
Compared with the trade dispute, a faster slowdown in China’s economy might hurt Taiwan more, as exports destined for China are mostly intended for the domestic market, Chu said.
That explains why the government aims to step up capital formation by 11.96 percent, while public enterprises seek to increase 8.63 percent, the minister said, adding that the room for the government to boost GDP growth is limited.
The government has also introduced subsidies for domestic trips and purchases of energy-saving home appliances in the hope of stimulating private consumption, Chu said.
The nation’s rapidly aging society may subdue the strength of the stimulus measures, DGBAS said.
The statistic agency also revised down its GDP growth estimate for last year from 2.66 percent to 2.6 percent.
While it revised up its fourth-quarter growth to 1.78 percent, from the 1.76 percent it predicted last month, it was the slowest pace of expansion since the second quarter of 2016.
Chu dismissed concerns about a recession, saying that the nation’s economy would prove resilient because Taiwanese semiconductor firms remain competitive worldwide, making them less vulnerable to the tariff dispute.
Shares in Taiwan closed at a new high yesterday, the first trading day of the new year, as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) continued to break records amid an artificial intelligence (AI) boom, dealers said. The TAIEX closed up 386.21 points, or 1.33 percent, at 29,349.81, with turnover totaling NT$648.844 billion (US$20.65 billion). “Judging from a stronger Taiwan dollar against the US dollar, I think foreign institutional investors returned from the holidays and brought funds into the local market,” Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺) said. “Foreign investors just rebuilt their positions with TSMC as their top target,
REVENUE PERFORMANCE: Cloud and network products, and electronic components saw strong increases, while smart consumer electronics and computing products fell Hon Hai Precision Industry Co (鴻海精密) yesterday posted 26.51 percent quarterly growth in revenue for last quarter to NT$2.6 trillion (US$82.44 billion), the strongest on record for the period and above expectations, but the company forecast a slight revenue dip this quarter due to seasonal factors. On an annual basis, revenue last quarter grew 22.07 percent, the company said. Analysts on average estimated about NT$2.4 trillion increase. Hon Hai, which assembles servers for Nvidia Corp and iPhones for Apple Inc, is expanding its capacity in the US, adding artificial intelligence (AI) server production in Wisconsin and Texas, where it operates established campuses. This
H200 CHIPS: A source said that Nvidia has asked the Taiwanese company to begin production of additional chips and work is expected to start in the second quarter Nvidia Corp is scrambling to meet demand for its H200 artificial intelligence (AI) chips from Chinese technology companies and has approached contract manufacturer Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to ramp up production, sources said. Chinese technology companies have placed orders for more than 2 million H200 chips for this year, while Nvidia holds just 700,000 units in stock, two of the people said. The exact additional volume Nvidia intends to order from TSMC remains unclear, they said. A third source said that Nvidia has asked TSMC to begin production of the additional chips and work is expected to start in the second
US President Donald Trump on Friday blocked US photonics firm HieFo Corp’s US$3 million acquisition of assets in New Jersey-based aerospace and defense specialist Emcore Corp, citing national security and China-related concerns. In an order released by the White House, Trump said HieFo was “controlled by a citizen of the People’s Republic of China” and that its 2024 acquisition of Emcore’s businesses led the US president to believe that it might “take action that threatens to impair the national security of the United States.” The order did not name the person or detail Trump’s concerns. “The Transaction is hereby prohibited,”
RSS