The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday cut its growth forecast for this year as global uncertainty heightens, posing a risk to the nation’s export-oriented economy.
The nation’s economy is forecast to expand 2.27 percent this year, down from the 2.41 percent the agency predicted in November last year, as sales of smartphones and other electronics products disappoint.
Taiwan is home to the world’s largest suppliers of chips, camera lenses, casings, battery packs, touchpanels and other critical components used in smartphones, laptops, TVs and other technology products.
“The economy is losing steam, but not in a recessionary state,” DGBAS Minister Chu Tzer-ming (朱澤民) told a news conference.
The ongoing tariff dispute between the US and China poses the biggest downside risk, while monetary normalization moves by global central banks and financial market volatility might also weigh on growth, Chu said.
Exports are expected to edge up 0.19 percent this year after contracting in the first half and rebounding in the fall when global technology brands launch new-generation devices, the DGBAS said in a report.
Imports are forecast to decline 0.95 percent this year, dragged by soft oil and raw material prices, as well as tepid demand for capital equipment, it said.
“Poor [order] visibility has led companies to turn cautious about capacity upgrade or expansion,” the minister said.
Compared with the trade dispute, a faster slowdown in China’s economy might hurt Taiwan more, as exports destined for China are mostly intended for the domestic market, Chu said.
That explains why the government aims to step up capital formation by 11.96 percent, while public enterprises seek to increase 8.63 percent, the minister said, adding that the room for the government to boost GDP growth is limited.
The government has also introduced subsidies for domestic trips and purchases of energy-saving home appliances in the hope of stimulating private consumption, Chu said.
The nation’s rapidly aging society may subdue the strength of the stimulus measures, DGBAS said.
The statistic agency also revised down its GDP growth estimate for last year from 2.66 percent to 2.6 percent.
While it revised up its fourth-quarter growth to 1.78 percent, from the 1.76 percent it predicted last month, it was the slowest pace of expansion since the second quarter of 2016.
Chu dismissed concerns about a recession, saying that the nation’s economy would prove resilient because Taiwanese semiconductor firms remain competitive worldwide, making them less vulnerable to the tariff dispute.
PROTECTIONISM: China hopes to help domestic chipmakers gain more market share while preparing local tech companies for the possibility of more US sanctions Beijing is stepping up pressure on Chinese companies to buy locally produced artificial intelligence (AI) chips instead of Nvidia Corp products, part of the nation’s effort to expand its semiconductor industry and counter US sanctions. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, sources familiar with the matter said. The policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid handicapping its own AI start-ups and escalating tensions with the US, said the sources, who asked not to be identified because the
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
Her white-gloved, waistcoated uniform impeccable, 22-year-old Hazuki Okuno boards a bullet train replica to rehearse the strict protocols behind the smooth operation of a Japanese institution turning 60 Tuesday. High-speed Shinkansen trains began running between Tokyo and Osaka on Oct. 1, 1964, heralding a new era for rail travel as Japan grew into an economic superpower after World War II. The service remains integral to the nation’s economy and way of life — so keeping it dazzlingly clean, punctual and accident-free is a serious job. At a 10-story, state-of-the-art staff training center, Okuno shouted from the window and signaled to imaginary colleagues, keeping
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
RSS