Academia Sinica yesterday cut its GDP growth forecast for Taiwan this year to 2.35 percent from a previous estimate of 3.05 percent in December, citing lower contributions from government spending and public investment.
The institute said raising the ceiling on national debt may be a solution to help revive the economy, which will give the government leeway to use debt-financing to boost domestic spending and investment.
However, since the tax burden will be heavier after raising the debt ceiling, consensus on the issue must be reached between the government and the public, the institute said.
It added that the government could encourage the private sector to participate in public infrastructure projects to offset sluggish public investment.
“Taiwan’s economy is on a modest recovery track, with high levels of uncertainty,” Academia Sinica economic research fellow Ray Chou (周雨田) told a press conference.
The 2.35 percent economic growth for this year forecast by the institute was slightly lower than the 2.4 percent expansion estimated by the Directorate-General of Budget, Accounting and Statistics (DGBAS) in May. The DGBAS is scheduled to announce initial growth results for the second quarter at the end of this month.
Peng Shin-kun (彭信坤), director of Academia Sinica’s Institute of Economics, said Taiwan’s GDP growth in the second half is expected to reach 2.54 percent, up from the 2.15 percent year-on-year expansion in the first half.
However, due to limitations on government budgets, investments from the public sector may continue to decline this year by 6.36 percent, the institute said in its report.
Peng said raising the ceiling on national debt may be a solution for Taiwan’s economy in the future, but the government would have to communicate well with the public over the issue first, before taking such action.
The institute said export growth momentum may remain sluggish this year. It forecast an annual growth of 4.93 percent in real goods and service exports this year because the global economic recovery is still facing difficulties.
Peng said local manufacturers should focus more on Southeast Asian markets in the future to diversify risks and lower over-dependence on the Chinese economy.
Meanwhile, lower growth in real wages has caused consumers to limit their spending and affected expansion of private consumption, causing annual growth in this sector to slow to 1.26 percent, the report’s data showed.
However, annual growth in imports of equipment reached 8.5 percent in the first half of this year, an indication that private investment — the major driver of the economy this year — may show a substantial increase this year.
The institute set its latest interval forecast for GDP growth this year at a level between 1.13 percent and 3.71 percent, with various global economic uncertainties to determine the trend in the future.
Growth momentum in emerging economies, the pace of the US economy’s recovery and the chances of the eurozone moving out of recession will be the three uncertainties affecting Taiwan’s economy this year, the institute said.
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
It was late morning and steam was rising from water tanks atop the colorful, but opaque-windowed, “soapland” sex parlors in a historic Tokyo red-light district. Walking through the narrow streets, camera in hand, was Beniko — a former sex worker who is trying to capture the spirit of the area once known as Yoshiwara through photography. “People often talk about this neighborhood having a ‘bad history,’” said Beniko, who goes by her nickname. “But the truth is that through the years people have lived here, made a life here, sometimes struggled to survive. I want to share that reality.” In its mid-17th to
‘MAKE OR BREAK’: Nvidia shares remain down more than 9 percent, but investors are hoping CEO Jensen Huang’s speech can stave off fears that the sales boom is peaking Shares in Nvidia Corp’s Taiwanese suppliers mostly closed higher yesterday on hopes that the US artificial intelligence (AI) chip designer would showcase next-generation technologies at its annual AI conference slated to open later in the day. The GPU Technology Conference (GTC) in California is to feature developers, engineers, researchers, inventors and information technology professionals, and would focus on AI, computer graphics, data science, machine learning and autonomous machines. The event comes at a make-or-break moment for the firm, as it heads into the next few quarters, with Nvidia CEO Jensen Huang’s (黃仁勳) keynote speech today seen as having the ability to
The battle for artificial intelligence supremacy hinges on microchips, but the semiconductor sector that produces them has a dirty secret: It is a major source of chemicals linked to cancer and other health problems. Global chip sales surged more than 19 percent to about US$628 billion last year, according to the Semiconductor Industry Association, which forecasts double-digit growth again this year. That is adding urgency to reducing the effects of “forever chemicals” — which are also used to make firefighting foam, nonstick pans, raincoats and other everyday items — as are regulators in the US and Europe who are beginning to
RSS