The nation’s GDP is forecast to contract by 0.1 percent this quarter from last quarter due to lackluster exports, but the economy would resume growth next quarter on the back of strong investments, Cathay Financial Holding Co (國泰金控) said on Wednesday.
The projection was in contrast to the Directorate-General of Budget, Accounting and Statistics’ (DGBAS) forecast last month of a quarterly increase of 0.57 percent in GDP.
“We are less upbeat than the statistics agency,” Hsu Chih-chiang (徐之強), an economics professor at National Central University who led a research team commissioned by Cathay Financial, told a news conference in Taipei.
“Exports retreated bigger than expected in the first two months, which implied that the statistics agency might need to correct its forecast,” he said.
DGBAS predicted that first quarter exports would drop 2.81 percent year-on-year, but exports in the first two months already plunged 4.1 percent from the same period last year, he said.
“It is very difficult for exports to take a turn for the better this month, as exports in March last year hit US$29.98 billion, a record high for a single month,” Hsu said.
Taiwan’s exports last month contracted for the fourth consecutive month, showing the biggest annual decline of 8.8 percent over the past year, Ministry of Finance data showed.
Although the fractional decline in GDP could be a warning for the business cycle given that the nation has not seen quarterly declines in GDP for a few years, Hsu told the Taipei Times that he was not worried, as his team expects the economy to rebound next quarter with a quarterly growth of 0.61 percent.
“We do not expect Taiwan’s exports to improve in the following quarters amid uncertainties such as the US-China trade disputes or a hard Brexit, but the nation’s economy could be fueled by strong public and private investments,” Hsu said.
Cathay Financial forecast investment in Taiwan to grow 3.5 percent from last year, compared with the government’s 5 percent forecast.
The central bank would keep benchmarks rates unchanged this year, it said.
“If Taiwan’s GDP declines year-on-year for two quarters in a row, it is possible that the central bank would consider cutting the benchmark rates, but we think this is not likely to happen,” Hsu said.
Cathay Financial retained its GDP growth forecast for the year of 2.2 percent, he said.
Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Monday introduced the company’s latest supercomputer platform, featuring six new chips made by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), saying that it is now “in full production.” “If Vera Rubin is going to be in time for this year, it must be in production by now, and so, today I can tell you that Vera Rubin is in full production,” Huang said during his keynote speech at CES in Las Vegas. The rollout of six concurrent chips for Vera Rubin — the company’s next-generation artificial intelligence (AI) computing platform — marks a strategic
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
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,”
Garment maker Makalot Industrial Co (聚陽) yesterday reported lower-than-expected fourth-quarter revenue of NT$7.93 billion (US$251.44 million), down 9.48 percent from NT$8.76 billion a year earlier. On a quarterly basis, revenue fell 10.83 percent from NT$8.89 billion, company data showed. The figure was also lower than market expectations of NT$8.05 billion, according to data compiled by Yuanta Securities Investment and Consulting Co (元大投顧), which had projected NT$8.22 billion. Makalot’s revenue this quarter would likely increase by a mid-teens percentage as the industry is entering its high season, Yuanta said. Overall, Makalot’s revenue last year totaled NT$34.43 billion, down 3.08 percent from its record NT$35.52
RSS