A global economic slowdown coupled with lower consumer spending prompted a local economic think tank yesterday to lower its GDP growth forecast to 4.5 percent for this year, down from a 4.67 percent forecast in April.
The Chung-Hua Institution for Economic Research (CIER, 中經院), which publishes its findings on the economy quarterly, also sounded an alarm on inflation, noting that the consumer price index (CPI) reached 4.19 percent for the first six months, its highest level in 13 years.
The Taipei-based institute forecast an inflation rate of 3.66 percent for this year and said containing inflation was the toughest challenge facing the new government.
Wang Lee-rong (王儷容), director of CIER’s Center for Economic Forecasting, said the institute decided to adjust its GDP growth prediction downward by 0.17 percentage points after factoring in soaring fuel and raw material costs.
“The nation will continue to post economic growth in the second half of this year, driven chiefly by the government’s stimulus package,” Wang said, referring to the NT$130 billion (US$4.28 billion) spending program to expand domestic demand.
On Thursday the legislature approved the special budget that the Cabinet said would be implemented before the end of this year to raise annual GDP growth by 0.45 percent.
Wang said the program would quickly have a positive effect on the economy, unlike the lifting of restrictions governing investment in China that would take a longer time to bear fruit.
Nevertheless, CIER predicted GDP growth would slip to 3.74 percent and 3.87 percent in the third and fourth quarters respectively. The figure hit 6.06 percent for the first quarter and is estimated to dip to 4.44 percent in the second quarter, the report said.
Wang said inflation was bound to dampen demand from around the world, including China and the US, Taiwan’s two largest trading partners.
“Mounting inflationary pressure will pose the biggest challenge for the government in its attempt to invigorate the economy,” Wang said, noting that rising fuel and food costs have led consumers to rein in spending.
Daigee Shaw (蕭代基), president of CIER, warned that people would need to change their lifestyles as crude oil prices would continue to rise to US$200 or even US$300 a barrel. CIER forecast the local currency would trade at an average of NT$30.49 against the US dollar this year, appreciating 7.16 percent from last year. In Taipei trading yesterday, the NT dollar closed NT$0.001 lower at NT$30.36 versus the greenback.
Looking ahead, the NT dollar will gain another 4.01 percent to trade at NT$29.27 on average against the US dollar next year, as the greenback will still be under pressure because of the US economic slowdown, the report said.
CIER’s revised GDP forecast was lower than the government’s official forecast of 4.78 percent, the Taiwan Research Institute’s (台綜院) 4.68 percent forecast and Polaris Research Institute’s (寶華綜合經濟研究院) 4.6 percent.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS