Despite soaring oil prices, there is no immediate risk of inflation, especially after the government gave the assurance that utilities rates will be kept at current levels, the Taiwan Institute of Economic Research (TIER,
Under government pressure amid concerns over inflation, the state-run Chinese Petroleum Corp (CPC, 中油), the nation's largest oil refiner, has promised not to raise its prices as long as global crude oil prices remain under US$60 a barrel.
As for fears about a possible hike in water and electricity prices, which would drive up the Consumer Price Index (CPI), David Hong (
"With the government's pledge to stabilize consumer prices, I think the threat of inflation does not exist," Hong said.
TIER predicts that the CPI could rise to 1.87 percent this year, which Hong said is still safe and lower than that of neighboring countries.
The central bank on Thursday lifted its benchmark interest rates for the third straight quarter by 0.125 percentage points out of concern over inflation. The bank said that the rising commodity prices may result in the CPI rising beyond the government's forecast of 1.67 percent for this year.
One uncertain factor is China's economic expansion, which is still faster than expected and may drive up prices of raw materials and drive up the CPI, Hong said.
He also predicted that the central bank will continue to raise interest rates to keep up with the US rates, but said that such adjustments would probably not be sharp or frequent to avoid hurting the already slow domestic economy.
The New Taiwan dollar has turned weak against its US counterpart this week due to foreign investors' sales of Taiwanese shares, but Hong said the local currency is likely to rise in the long term, as foreign capital is expected to flow in after Morgan Stanley Capital International Inc adjusted its evaluation of the benchmark TAIEX upward in May, and the FTSE Group classified Taiwan as a "developed market."
According to a poll conducted by TIER last month, local manufacturers turned optimistic about the nation's economic outlook in the next half of the year.
The survey showed that 54.6 percent of manufactures said they were positive about the economy, up from 26.9 percent in the previous survey, while only 8.5 percent said they were pessimistic, down from 18.2 percent.
The research institute attributed the cheerful sentiment to the political reconciliation among the ruling and opposition parties, as well as Premier Frank Hsieh's (
But the high spirits may be deflated by China's passage of its "Anti-Secession" Law, Hong said.
"I think the law will have a limited effect on Taiwan in the short term, but it's a latent crisis in the long-run that may impact on local and foreign investment to the nation," Hong said.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
RSS