Taiwan's economy grew at a slower-than-expected rate in the first quarter as lackluster private consumption offset robust exports, a government official said yesterday.
The slight correction would not hinder further economic growth during the rest of the year. Robust exports in the first quarter led the government to raise its gross domestic product (GDP) forecast for the full year to 4.31 percent from the 4.25 percent predicted previously.
"Growth momentum looks quite good for the year as the global economy is moving up which includes Taiwan's major trade partners, the US and China," Hsu Jan-yau (許璋瑤), minister of the Directorate-General of Budget, Accounting and Statistics (DGBAS), told a press conference.
"All the key indicators are moving up except for private consumption," he said.
Nationally, GDP was 4.93 percent during the first quarter, lower than the 5.06 percent estimated in February by the government's statistical agency.
The first-quarter figure of 4.93 percent growth also compares to a 6.4-percent expansion registered during the final quarter of last year, the fastest pace for six quarters, according to DGBAS figures.
"Private consumption is much more sluggish than we expected, primarily because of a sharp drop in automobile sales," Hsu said.
According to statistics compiled by the Ministry of Transportation and Communications, sales of new cars in Taiwan dropped by nearly 25 percent in the first quarter from the same period a year ago.
Private consumption, which makes up about two-thirds of Taiwan's total GDP figure, only increased by 2.07 percent instead of the 2.97 percent projected by the government.
But, the exports of goods and services grew at a faster-than-expected annual rate at 14.1 percent during the first three months, compared to the earlier estimates of 12.1 percent, Hsu said without giving detailed figures.
Manufacturing production, the biggest component of industrial output, also increased rapidly, rising 8.21 percent from a year ago, he said.
But, rocketing crude oil prices and high levels of credit and cash-card debt, which were partly blamed for sluggish personal consumption during the first three months, were concerns, Hsu said.
Cheng Cheng-mount (鄭貞茂), an economist at Citigroup, said he was inclined to keep his forecast unchanged.
"We haven't seen sufficient evidence to lift the forecast," Cheng said.
Cheng predicted that Taiwan's economy would expand by 3.9 percent this year from last year.
"Inflation is the only uncertainty and can erode economic growth," Cheng said.
The government predicted the consumer price index, a tool used to gauge an economy's inflation, would rise moderately by 1.8 percent this year after increasing by 1.35 percent in the January-March period from the same period last year.
Hsu said growth in the CPI would only take away about 0.1 percentage point from the nation's GDP this year as the hikes in energy and electricity prices did not reflect sky-high global oil prices.
CONSIDERATIONS: The NSTC instructed the park to assist laid-off workers and urge companies to use furlough programs to ease the effects of falling demand Firms in the Hsinchu Science Park (新竹科學園區), which houses major tech companies, reported laying off 496 employees last month amid weakened global demand, Hsinchu Science Park Bureau director-general Wayne Wang (王永壯) said yesterday. Wang told a news conference that 48 companies in the science park laid off employees last month, including one hard disk supplier which let go 241 employees as part of a plant closure due to falling demand. Other companies reported sporadic layoffs as they adjusted to weakening demand, he said. Wang made the remarks after local media reported the layoffs over the weekend. Although the global economy is struggling with high
DEJA VU: Echoing the probe into real-estate giant Evergrande Group, the bank is under Beijing police scrutiny after last week, telling investors it is ‘severely insolvent’ Chinese authorities said they recently opened criminal investigations into Zhongzhi Enterprise Group Co’s (中植企業) money management business, days after the embattled shadow banking giant revealed a shortfall of US$36.4 billion in its balance sheet. Police in Beijing said in a statement on WeChat that they took “criminal mandatory measures” against multiple suspects, identifying one by their last name, Xie (解). They urged investors to report cases or provide leads to the authorities, including filing complaints online. Xie Zhikun (解直錕), the group’s founder, died in 2021, but several of his relatives are executives at the company. The statement did not elaborate on what
German Chancellor Olaf Scholz and German Minister for Economic Affairs and Climate Action Robert Habeck have promised to solve investment subsidy issues for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Intel Corp, despite the country’s budget woes. Uncertainty over the funding to TSMC and Intel has arisen after a ruling by the German Federal Constitutional Court, which cast doubt over subsidies for construction of local semiconductor chip plants. On Nov. 15, the court ruled that the German government’s decision last year to reallocate 60 billion euros (US$65.74 billion) of unused funding from COVID-19 pandemic support measures to its Climate and Transformation Fund
NEW TREAD: The Taiwanese shoe brand paired with TSMC to turn silicon waste into a circular economy good, following its success making shoes from coffee grounds Ccilu International Inc (馳綠國際), a Taiwan-based footwear brand, has become the first company in the world to turn silicon waste from contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) into eco-friendly shoes. Last year, the global footwear industry saw the first pair of pressure-relief slippers made from recycled silicon waste by Ccilu. The brand continued to unveil follow-up collections, including sports shoes and massage slippers made from the same materials. In an interview with CNA, Ccilu CEO Wilson Hsu (許佳鳴) recalled the company’s innovation of the first pair of slippers made from silicon waste after its silicon waste treatment partner, Semisils Applied Materials