UNITED STATES
GDP growth misses target
The economy last year missed the 3 percent growth target of the administration of President Donald Trump for a second straight year, posting its slowest annual growth in three years as a slump in business investment deepened amid damaging trade tensions. The 2.3 percent expansion last year reported by the Department of Commerce on Thursday suggested the White House and Republicans’ massive US$1.5 trillion tax cut package had provided the economy only a temporary boost. Moderate growth undercuts the argument by Trump and his fellow Republicans that strong growth would pay for the tax cuts, which are expected to help push the federal budget deficit to US$1.02 trillion this year. Growth last year was the slowest since 2016 and followed the 2.9 percent notched in 2018.
AUTOMAKERS
VW offers Navistar US$2.9bn
Volkswagen AG (VW) offered to buy the rest of Navistar International Corp in a US$2.9 billion bid to secure a bridgehead in the the US’ heavy-truck market and step up its challenge to global rivals Daimler AG and Volvo AB. Volkswagen’s Traton SE unit has offered Navistar holders US$35 a share in cash, 45 percent higher than its Thursday closing price. Navistar, which builds International-brand trucks, school buses, defense vehicles and engines, said its board would review the proposal, adding that there is no assurance the deal would take place. Volkswagen already owns a stake of almost 17 percent.
RETAIL
Perssons get fortune boost
Hennes & Mauritz AB (H&M) chairman Stefan Persson just received a hefty retirement gift from investors. Persson, who on Thursday announced he is stepping down in May, added US$1.4 billion to his fortune, as the clothing retailer’s shares rose 9.4 percent in Stockholm. His son Karl-Johan, the CEO, is to take over as chairman and hand the CEO role to chief operating officer Helena Helmersson, making her the first woman to run H&M. The jump in share price reinforces the Perssons’ standing as Sweden’s richest family,with a fortune of more than US$20 billion, according to the Bloomberg Billionaires Index. Stefan Persson, 72, said it was a “natural change” to hand control to his son after two decades as chairman. He said the family, which owns about half of the business, would remain committed owners of the world’s second-largest garment retailer.
MACROECONOMICS
France, Italy post declines
The French and Italian economies unexpectedly shrank at the end of last year, casting a shadow over expectations the eurozone was on a firmer footing. The French economy contracted 0.1 percent amid a decline in exports and a huge drag from companies using up stocks rather than increasing production. All of the economists surveyed by Bloomberg had predicted growth. Without the inventory effect, growth would have been about 0.3 percent, according to Bloomberg Economics. Italy’s GDP fell 0.3 percent, the most in almost seven years. Neighboring Spain fared significantly better at the end of last year, reinforcing its position as one of Europe’s outperformers. Faster-than-anticipated growth of 0.5 percent was driven by buoyant exports and a strong increase in services. France’s unexpected contraction is a sting for French President Emmanuel Macron, who is already facing mass protests and strikes against his pension reforms that have disrupted household spending.
TECH TITAN: Pandemic-era demand for semiconductors turbocharged the nation’s GDP per capita to surpass South Korea’s, but it still remains half that of Singapore Taiwan is set to surpass South Korea this year in terms of wealth for the first time in more than two decades, marking a shift in Asia’s economic ranks made possible by the ascent of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). According to the latest forecasts released on Thursday by the central bank, Taiwan’s GDP is expected to expand 4.55 percent this year, a further upward revision from the 4.45 percent estimate made by the statistics bureau last month. The growth trajectory puts Taiwan on track to exceed South Korea’s GDP per capita — a key measure of living standards — a
Samsung Electronics Co shares jumped 4.47 percent yesterday after reports it has won approval from Nvidia Corp for the use of advanced high-bandwidth memory (HBM) chips, which marks a breakthrough for the South Korean technology leader. The stock closed at 83,500 won in Seoul, the highest since July 31 last year. Yesterday’s gain comes after local media, including the Korea Economic Daily, reported that Samsung’s 12-layer HBM3E product recently passed Nvidia’s qualification tests. That clears the components for use in the artificial intelligence (AI) accelerators essential to the training of AI models from ChatGPT to DeepSeek (深度求索), and finally allows Samsung
READY TO HELP: Should TSMC require assistance, the government would fully cooperate in helping to speed up the establishment of the Chiayi plant, an official said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said its investment plans in Taiwan are “unchanged” amid speculation that the chipmaker might have suspended construction work on its second chip packaging plant in Chiayi County and plans to move equipment arranged for the plant to the US. The Chinese-language Economic Daily News reported earlier yesterday that TSMC had halted the construction of the chip packaging plant, which was scheduled to be completed next year and begin mass production in 2028. TSMC did not directly address whether construction of the plant had halted, but said its investment plans in Taiwan remain “unchanged.” The chipmaker started
MORTGAGE WORRIES: About 34% of respondents to a survey said they would approach multiple lenders to pay for a home, while 29.2% said they would ask family for help New housing projects in Taiwan’s six special municipalities, as well as Hsinchu city and county, are projected to total NT$710.65 billion (US$23.61 billion) in the upcoming fall sales season, a record 30 percent decrease from a year earlier, as tighter mortgage rules prompt developers to pull back, property listing platform 591.com (591新建案) said yesterday. The number of projects has also fallen to 312, a more than 20 percent decrease year-on-year, underscoring weakening sentiment and momentum amid lingering policy and financing headwinds. New Taipei City and Taoyuan bucked the downturn in project value, while Taipei, Hsinchu city and county, Taichung, Tainan and Kaohsiung
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