Taiwan’s economy might expand 2.2 percent next year, slowing from an estimated 2.53 percent this year, as the US-China trade dispute might weigh on exports, but private investment could rise if the government helps foster capital repatriation, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The expectation of a slowdown is in line with the global economic trend, as a solution to the trade war remains evasive, the Taipei-based think tank said.
“We do not see evident growth drivers for next year,” TIER economist Gordon Sun (孫明德) told a media briefing in Taipei.
Exports, which account for 70 percent of GDP, are unlikely to put up a strong performance as they did this year, with the world’s two largest economies locked in a trade stalemate, Sun said.
TIER said it expects outbound shipments of goods and services to grow 3.55 percent while imports might advance 3.98 percent, representing little or no change from 3.92 percent and 3.98 percent this year respectively.
Taiwan is home to the world’s largest contract chipmakers, chip designers and suppliers of camera lenses and other critical components used in smartphones, personal computers, and the Internet of Things and artificial intelligence applications.
TIER voiced concern that lackluster exports and ongoing capital flight from emerging markets, including Taiwan, would have spillover effects on domestic demand.
Consumers might refrain from spending next year as the local bourse can no longer generate a “wealth effect” after falling below 10,000 points and has yet to show signs of stabilization, Sun said.
Private consumption is expected to increase 2.2 percent, slightly lower than a 2.26 percent pickup projected for this year, the institute said.
Despite the slowdown, the central bank might raise interest rates in the first quarter of next year to help stem capital outflows, TIER president Lin Chien-fu (林建甫) said.
The US Federal Reserve is widely expected to raise interest rats again next month and high-yield bonds would attract further global capital to the US, contributing to volatility across global financial markets, Lin said.
The New Taiwan dollar might weaken to an average of NT$30.6 against the US dollar, from NT$30.13 this year, TIER said.
However, the US-China trade dispute is not entirely harmful, as it presents an opportunity for capital repatriation, Sun said.
Taiwanese firms based in China could shift manufacturing facilities home if the government can help solve labor and land shortages, and guarantee a stable electricity and water supply, he said.
INTERGRATION: Jensen Huang said that every Nvidia department and function of the company should be using AI, after reportedly saying staff were ‘insane’ not to Nvidia Corp is in a “unique” position in the market, despite facing intensifying competition, chief executive officer Jensen Huang (黃仁勳) said during a brief visit to Taiwan yesterday amid a potentially growing challenge from Google for the artificial intelligence (AI) chip market. Huang told reporters that the AI market is “extremely large” and that while there is a lot of competition, Nvidia’s “condition is very strong and our position is very unique.” Huang, who arrived in Taipei on Thursday, was responding to questions about the possible threat posed by Google. According to a report in The Information on Tuesday, Meta has been in
Charming US President Donald Trump one week, angering China the next, Japanese Prime Minister Sanae Takaichi has had a busy start and is riding high in the polls, all on a few hours of sleep a night. However, the honeymoon might end soon for the Margaret Thatcher-admiring leader if a spat with China escalates further and she fails to keep inflation in check. “I believe Prime Minister Takaichi will surely do what she needs to do, so I trust her,” Kozue Otsuka, 50, told reporters at a festival this week for business owners seeking good fortune. While buying a lucky kumade rake featuring
INSULATED: The company said it is less exposed to global complications, as it has built a strong footprint worldwide, and has multiple sources of rare earths and raw minerals Merck Group yesterday said it would ramp up production next year at its new flagship facility in Kaohsiung’s Lujhu District (路竹) to satisfy growing demand for advanced semiconductor materials and specialty gases, and to address supply resilience issues amid mounting geopolitical risks. Merck made the remarks during a news conference before the inauguration of its 500 million euros (US$582.1 million) facility, which is also to supply other markets in the Asia-Pacific region, it said. Merck executive board deputy chair and electronics CEO Kai Beckmann told reporters the company adopted a “local-for-local” strategy about seven years ago to address the cycle time of
RIDING THE WAVE: The race to build AI infrastructure has lifted the valuations of top memory makers, such as Micron, amid dwindling inventories and supply challenges Micron Technology Inc is to spend ￥1.5 trillion (US$9.6 billion) to build a plant in western Japan to make memory chips for artificial intelligence (AI) applications, the Nikkei reported on Saturday. The move comes as Micron seeks to diversify advanced chip production outside of Taiwan, the Nikkei article said, citing people familiar with the matter. The new factory will manufacture high-bandwidth memory (HBM) chips, a key component for working with AI processors such as those made by Nvidia Corp, the report said. Micron would build the facility within the compound of its Hiroshima plant, starting in May next year, with plans to launch
RSS