The global economic upswing is expected to continue next year, albeit at a slower pace as rising oil prices and less market stimulus cut into the strong momentum built up in the second half of last year and the first quarter of this year, an economist said yesterday.
"After a strong bounce worldwide over the past year, growth slowed somewhat in the second quarter but we expect the rosy picture to continue in 2005," John Calverley, chief economist and strategist with American Express Bank, told reporters in Taipei yesterday.
Calverley's short visit to Taiwan was part of a whirlwind Asian tour that will take him to several capitals, with Taipei being the second stop, to share his views on the world economic outlook.
Looking back at the past 15 months, Calverley said China's investment boom, reduced uncertainty in Iraq and strong consumer spending on the back of low borrowing rates and rising house prices have helped global growth to soar.
However, the pace of growth is expected to slow through next year even if "the world economy remains in a healthy state in many respects," he said.
The tight supply/demand balance of crude oil, fueled by China's rapid growth in demand, has pushed oil prices over US$50 a barrel from US$25-30 last year.
"The rise is estimated to cut world GDP growth by about 1 percent in 2004 and 2005," Calverley said.
Furthermore, expected higher interest rates, higher mortgage rates that will reduce household refinancing, slowing corporate investment growth and China's efforts to put the clamps on an overheating economy are all contributing to what will likely be slower growth next year, Calverley said.
For Taiwan's part, many indicators have shown that the economy will follow the global trend and experience lower yet rosy growth in the coming year.
"We forecast that Taiwan's economic growth will edge down to 4.8 percent next year from this year's estimated figure of 5.8 percent," Calverley said.
Still, the figure is much higher than last year's 3.2 percent and the record low of minus 2.18 percent in 2001, according to figures from the Directorate General of Budget, Accounting and Statistics.
Calverley's forecast echoed a monthly report released by the Taiwan Institute of Economic Research yesterday, which suggested manufacturers will become more cautious over the next six months as economic expansion slows both at home and abroad.
The institute's September survey showed that 36.8 percent of polled companies -- down from August's 43.7 percent -- are expecting better economic signs between now and March.
Those with a bearish point of view on economic conditions rose from 13.6 percent in August to 20.6 percent last month, while 42.6 percent believed the economic climate will remain unchanged, a slight decrease from 42.7 percent the previous month.
Although global expansion has decelerated in the second quarter, the institute said that Taiwan's economic recovery will continue in a stable manner this year, which might result in the best performance in eight years.
PROTECTIONISM: China hopes to help domestic chipmakers gain more market share while preparing local tech companies for the possibility of more US sanctions Beijing is stepping up pressure on Chinese companies to buy locally produced artificial intelligence (AI) chips instead of Nvidia Corp products, part of the nation’s effort to expand its semiconductor industry and counter US sanctions. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, sources familiar with the matter said. The policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid handicapping its own AI start-ups and escalating tensions with the US, said the sources, who asked not to be identified because the
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
Her white-gloved, waistcoated uniform impeccable, 22-year-old Hazuki Okuno boards a bullet train replica to rehearse the strict protocols behind the smooth operation of a Japanese institution turning 60 Tuesday. High-speed Shinkansen trains began running between Tokyo and Osaka on Oct. 1, 1964, heralding a new era for rail travel as Japan grew into an economic superpower after World War II. The service remains integral to the nation’s economy and way of life — so keeping it dazzlingly clean, punctual and accident-free is a serious job. At a 10-story, state-of-the-art staff training center, Okuno shouted from the window and signaled to imaginary colleagues, keeping
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
RSS