The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday cut its forecast for GDP growth for this year to 3.04 percent, down from the 3.56 percent it projected in April, as a global economic slowdown, especially in China, affects exports.
However, academics who joined the discussion challenged the institution’s new forecast, saying it would be difficult — if not impossible — for the economy to expand 3 percent this year and the government should focus its resources on improving domestic demand.
Exports, which drove more than 70 percent of GDP growth in the first quarter, are predicted to grow 3.88 percent this year, sharply down from a prior estimate of 6.26 percent growth, the CIER report showed.
Photo: CNA
“The second half may put up a weaker performance compared with the first half owing to a higher base,” CIER researcher Peng Su-ling (彭素玲) told a media briefing.
GDP growth likely reached 3.11 percent in the first half of the year, but could decelerate to 2.97 percent for the rest of the year, with major economies proving to be weaker than expected, Peng said.
Slowing global growth is unfavorable to Taiwanese exports, which contracted 7.1 percent in the first half, the report said.
Taiwanese exports to major trading partners, notably China and Southeast Asian nations, are declining, while South Korea is gaining market share, the report said.
The trend suggests declining competitiveness among local exporters, Peng said.
To make things worse, China is reducing its dependence on imports of electronic components from Taiwan, as it builds up its own supply chain as part of its economic restructuring, Peng said.
On the currency front, the New Taiwan dollar has risen 2.67 percent versus the US dollar so far this year, while the yen and the won have retreated 1.89 percent and 1.5 percent respectively over the same period, Peng said.
A strong NT dollar is eroding exporters’ bottom lines, he said.
Government agencies are looking for ways to boost the nation’s exports and the economy as a whole, with some academics suggesting establishing a sovereign wealth fund to help finance social welfare spending and others calling for the establishment of a more investment-friendly environment.
Bills Finance Association (票券公會) chairman Hermann Wu (吳正慶) said that he and his peers doubt the economy can grow by 3 percent this year.
National Central University economics professor Chiou Jiunn-rong (邱俊榮) suggested that the government focus its efforts on strengthening domestic demand to support economic growth.
However, he added that the government gives too much importance to GDP figures.
“GDP growth may not improve or reflect the well-being of the public the way a wage increase does,” Chiou said.
The paramount chief of a volcanic island in Vanuatu yesterday said that he was “very impressed” by a UN court’s declaration that countries must tackle climate change. Vanuatu spearheaded the legal case at the International Court of Justice in The Hague, Netherlands, which on Wednesday ruled that countries have a duty to protect against the threat of a warming planet. “I’m very impressed,” George Bumseng, the top chief of the Pacific archipelago’s island of Ambrym, told reporters in the capital, Port Vila. “We have been waiting for this decision for a long time because we have been victims of this climate change for
MASSIVE LOSS: If the next recall votes also fail, it would signal that the administration of President William Lai would continue to face strong resistance within the legislature The results of recall votes yesterday dealt a blow to the Democratic Progressive Party’s (DPP) efforts to overturn the opposition-controlled legislature, as all 24 Chinese Nationalist Party (KMT) lawmakers survived the recall bids. Backed by President William Lai’s (賴清德) DPP, civic groups led the recall drive, seeking to remove 31 out of 39 KMT lawmakers from the 113-seat legislature, in which the KMT and the Taiwan People’s Party (TPP) together hold a majority with 62 seats, while the DPP holds 51 seats. The scale of the recall elections was unprecedented, with another seven KMT lawmakers facing similar votes on Aug. 23. For a
Taiwan must invest in artificial intelligence (AI) and robotics to keep abreast of the next technological leap toward automation, Vice President Hsiao Bi-khim (蕭美琴) said at the luanch ceremony of Taiwan AI and Robots Alliance yesterday. The world is on the cusp of a new industrial revolution centered on AI and robotics, which would likely lead to a thorough transformation of human society, she told an event marking the establishment of a national AI and robotics alliance in Taipei. The arrival of the next industrial revolution could be a matter of years, she said. The pace of automation in the global economy can
All 24 lawmakers of the main opposition Chinese Nationalists Party (KMT) on Saturday survived historical nationwide recall elections, ensuring that the KMT along with Taiwan People’s Party (TPP) lawmakers will maintain opposition control of the legislature. Recall votes against all 24 KMT lawmakers as well as Hsinchu Mayor Ann Kao (高虹安) and KMT legislative caucus whip Fu Kun-chi (傅崐萁) failed to pass, according to Central Election Commission (CEC) figures. In only six of the 24 recall votes did the ballots cast in favor of the recall even meet the threshold of 25 percent of eligible voters needed for the recall to pass,
RSS