The central bank might consider cutting interest rates this quarter if data due on Friday next week show that GDP growth was lower than 3 percent in the first half, economists said yesterday.
The Cabinet on Wednesday instructed the National Development Council to recommend measures to boost exports, which contracted 7.1 percent in the first six months, worse than the 6.95 percent fall the statistics agency projected in May.
The central bank was not a participant in the Cabinet’s discussions, but it might decide to step in and lower interest rates to help stimulate business activity, National Central University economics professor Hsu Chih-chiang (徐之強) said by telephone.
Low borrowing costs would encourage firms to increase the scope of their operations on credit and the negative consumer price index (CPI) reading also lends support to the case for monetary easing, Hsu said.
As of last month, the inflationary gauge had declined an average of 0.65 percent, dragged down by cheaper fuel prices, the Directorate-General of Budget, Accounting and Statistics said.
The agency is due to publish second-quarter GDP data on Friday next week. The figures showed a 3.37 percent increase in the first quarter.
“Poor exports raise alarms if they are not caused by declines in the price of crude,” Hsu said.
The Ministry of Finance has predicted a continued downturn in export data this quarter due to a high base in July and August last year.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, last week gave a conservative guidance for business going forward, as inventory adjustments linger for its clients in emerging markets.
Against this backdrop, the central bank might cut interest rates by 12.5 basis points this and next quarter, HSBC Hong Kong-based economist John Zhu (朱日平) said.
The British banking group expects Taiwan’s exports to soften in coming months after export orders in May dropped 5.9 percent year-on-year — the fastest pace of decline in two years.
A strong New Taiwan dollar is adding to the challenges, with a 10 percent appreciation in its real effective exchange value this year, whereas central banks in the region have loosened their monetary policy, Zhu said.
Taiwan’s dependence on exports makes the economy susceptible to global cyclical volatility, and the government could shift the focus to domestic demand in a bid to revive the economy, Hsu said.
To that end, the government could increase investment by asking different agencies and state enterprises to upgrade their capital equipment, Zhu said.
For example, Taiwan Power Co (Taipower, 台電) could facilitate the installment of smart meters and smart grids nationwide, Hsu said.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
CUSTOMERS’ BURDEN: TSMC already has operations in the US and is a foundry, so any tariff increase would mostly affect US customers, not the company, the minister said Taiwanese manufacturers are “not afraid” of US tariffs, but are concerned about being affected more heavily than regional economic competitors Japan and South Korea, Minister of Economic Affairs J.W. Kuo (郭智輝) said. “Taiwan has many advantages that other countries do not have, the most notable of which is its semiconductor ecosystem,” Kuo said. The US “must rely on Taiwan” to boost its microchip manufacturing capacities, Kuo said in an interview ahead of his one-year anniversary in office tomorrow. Taiwan has submitted a position paper under Section 232 of the US Trade Expansion Act to explain the “complementary relationship” between Taiwan and the US