Amid global economic uncertainty, the nation's export-driven economy may continue to recover next year -- and it is expected to arrive at a gross domestic product (GDP) of 3.77 percent in 2003, a local think thank estimated yesterday.
"We are sure to undergo a mild recovery, but it may still be weak and volatile due to several economic variables -- specifically the US's possible declaration of war against Iraq," said Wang Lee-rong (
Wang added that it's still too early to predict the war's impact on the world economy because wars, in general, may bring destruction, but may also stimulate demand in the areas of private consumption and high-tech equipment -- to the benefit of export economies like Taiwan's.
But the think tank's reports warned that the nation's 2003 GDP may drop from an estimated 3.77 percent to 2.3 percent if a US-led war against Iraq does happen. On the contrary, if that dispute is to be resolved peacefully -- and if a peaceful relationship developed across the Taiwan Strait -- the figure may grow further to 5.7 percent in 2003.
The semi-official institute yesterday also revised upward its 2002 GDP estimates from 2.9 to 3.1 percent with 3.77 percent in the third quarter and 3.48 percent in the fourth quarter.
The slower-than-expected economic recovery in the second half of the year was a result of anti-terrorism efforts in the west and successful terrorist attacks, the US's corporate scandals and lack of economic confidence, said the institute's president Mai Chao-cheng (
Presenting a rosier economic forecast, the government's Directorate General of Budget, Accounting and Statistics announced, in mid August, that Taiwan's GDP in the second quarter climbed to 3.98 percent, which was expected to surge to an estimated 4.06 percent in the third quarter and 3.34 percent in the fourth quarter.
Although the nation's exports and imports have greatly picked up in the second quarter, inbound investment, however, remained sluggish, Mai said.
Overall domestic investment was expected to decline by 1.71 percent this year -- "a stagnant status, so to speak, that will negatively impact the local economy," he said.
Mai however added that, compared to last year's 20.61-percent contraction in domestic investments, this year's inbound investment has greatly improved and the institute foresees a stable 4.65-percent growth in domestic investment next year.
Chou Zi (
"The implementation of the `three links' is sure to help the nation's economic development," Chou commented.
Saying he is even more optimistic about Taiwan's economy, Jonathan Anderson, executive director of Goldman Sachs' Asia-Pacific Investment Research, yesterday said that the investment bank has predicted a 2003 economic growth of 4 percent for Taiwan.
Anderson, however, said that the nation's IT sector may continue to experience negative growth due to the decline of demand in the US. He said there won't be an upturn until the second quarter of next year.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such