Citigroup Taiwan yesterday lowered its forecast for the nation’s GDP growth from its previously-estimated 4.5 percent to 4 percent this year on a slowdown in the US economy, which it expects to continue for between another six months to a year.
Citigroup forecasted the US economy would drop to 0.8 percent and 0.9 percent respectively this year and next year from the previously-estimated 1.6 percent and 2.1 percent.
As the market speculated that the Federal Reserve’s interest rate cuts have neared an end, Citigroup said it did not expect the US economy to recover in the short-term.
“The worst is over, but the best has yet to come,” Cheng Cheng-mount (鄭貞茂), Citigroup’s vice president and chief economist, said at a media briefing yesterday.
Cheng said that, although the nation’s economic growth is expected to decline to an estimated 4 percent from last year’s 5.7 percent, it is also expected to rebound to 4.5 percent next year on the back of growing private consumption and capital investment.
High-tech sector exports, which will be the driving force behind the nation’s export growth, will offset the challenges of a rising consumer price index (CPI) and an expected export slowdown, Citigroup said.
Citigroup also lowered its GDP forecasts for leading industrial countries such as Japan and the UK 1.7 percent and 1.4 percent respectively, as global economic conditions remain tense.
On the interest rate front, Citigroup said the US Fed is likely to further cut its interest rate by 1.25 percentage points down to 1 percent in the third quarter.
They said that the greenback will pick up slowly in the fourth quarter.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) investment project in Arizona has progressed better than expected, but it still faces challenges such as water and labor shortages, National Development Council (NDC) Minister Yeh Chun-hsien (葉俊顯) said yesterday. Speaking with reporters after visiting TSMC’s Arizona hub and attending the SelectUSA Investment Summit in Maryland last week, Yeh said TSMC’s Arizona site turned a profit of NT$16.14 billion (US$514 million) last year in its first full year of mass production. “TSMC told me it was surprised by the smooth trial run of the first fab, which has left the company optimistic about the project’s outlook,”
RSS