Polaris Research Institute (寶華綜合經濟研究院) adjusted its GDP forecast for Taiwan next year to 4.57 percent yesterday, up from its previous estimate of 4.10 percent and higher than the Directorate-General of Budget, Accounting and Statistics’ (DGBAS) prediction of 4.39 percent.
The Taipei-based institute said the economy is expected to return to normal next year because the global economy is recovering and exports to China, which drive both internal and external demand, are expanding.
“The upward adjustment is a result of the lower base period, an Asian-led global economic recovery and the increasing inventory buildup,” Polaris president Liang Kuo-yuan (梁國源) told a press conference.
The institute said economic growth this year would contract by 2.47 percent from last year, compared to DGBAS’ Nov. 26 estimate of a 2.53 percent decline. Liang also shrugged off market concerns over the possibility of a double-dip recession next year.
“It is almost impossible for that to happen [a double dip] in the first half of next year, although a cautious observation is needed for the second half of the year,” he said.
Taiwan tumbled into its worst recession since 2001 in the fourth quarter of last year after the nation reported a decline of 7.11 percent in GDP following a drop of 0.80 percent in the previous quarter.
The economy has gradually come out of the recession in the second half of the year, after the GDP showed a decline of 1.29 percent in the third quarter following declines of 6.85 percent and 9.06 percent respectively in the preceding quarters.
The institute’s data showed that the inventory-output ratio continued to fall for the third consecutive quarter to 0.32, nearing the long-term average ratio of 0.31 between 2000 and this year. This indicates that inventory run-down is coming to an end as demand increases amid accelerated economic growth.
While the economic prospects next year are upbeat, Liang said there are three major risks facing the recovering global economy, namely asset bubbles, the slower-than-expected recovery in the US and EU, as well as risks regarding governments’ rapid withdrawl of economic stimulus measures.
Asked to comment on the impact of an economic pact with China, Liang said that “the inking of an ECFA [economic cooperation framework agreement] will not produce an immediate outcome for the nation’s economy next year,” adding that what the agreement will include was still uncertain.
The institute also forecast that the consumer price index (CPI) in the fourth quarter would decline 1.09 percent and that the CPI for next year will see an increase of 1.10 percent.
With the increasing prices of international products, the CPI has reported a steady change compared with the precipitous declines in the same period last year, Liang said.
In terms of the exchange rate for the New Taiwan dollar against the US dollar, the institute adjusted its forecast to NT$31.8 versus the greenback next year and retained its average estimate of NT$33.0 for this year.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS