The COVID-19 pandemic might persist for nine months, from an earlier estimate of three months, and would wipe out almost all economic gains this year in the absence of the government’s relief and stimulus measures, top statistics and monetary officials said yesterday.
The pandemic could erase GDP growth by 1.8 to 2.3 percentage points this year through disruptions to trade channels abroad and consumer spending at home, Directorate-General of Budget, Accounting and Statistics Minister Chu Tzer-ming (朱澤民) told a meeting of the legislature’s Finance Committee in Taipei.
That would leave Taiwan with a parlous growth of between 0.4 percent and 0.9 percent, without government intervention, Chu said.
Photo: CNA
The statistics agency in February set its forecast for GDP growth this year at 2.37 percent, with the pandemic expected to affect China for three months, based on the global experience with SARS in 2003.
However, the novel coronavirus last month rapidly spread to Europe, the US and other parts of the world, forcing world leaders to shut non-essential businesses and international travel, and impose social distancing before the development of a vaccine.
While uncertainties remain high, Chu said the Taiwanese economy could still grow between 1.3 and 1.8 percent this year, bolstered by government relief and stimulus packages.
A special aid fund of NT$60 billion (US$2 billion) has cleared the legislature and the Cabinet is to propose an extra NT$150 billion later this week to help companies and households weather the virus shock, Chu said.
The package would shore up GDP by 0.9 percentage points, he said.
The goal now is to maintain an economic expansion of at least 1 percent, instead of 2 percent as earlier forecast, provided the world could return to normalcy in the third quarter, Chu said.
The IMF forecast last week that Taiwan’s economy would contract 4 percent is excessively pessimistic and inconsistent with its projected unemployment rate of 4.4 percent, he said.
An economic decline of 4 percent would put far more people out of work than an increase of 70,000 to 80,000 as the IMF suggested, he added.
A central bank official agreed, saying the international research body had underestimated Taiwan’s economic might for years.
The IMF does not have a designated unit to study Taiwan’s economy, accounting for its lack of accuracy, central bank Deputy Governor Yen Tzung-ta (嚴宗大) said.
The global economy is most likely to stage a U-shaped recovery, but much hinges on when the virus could be brought under control, Yen told legislators.
The central bank can make quick responses if necessary after cutting interest rates by 25 basis points last month, Yen said.
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
MORE WEIGHT: The national weighting was raised in one index while holding steady in two others, while several companies rose or fell in prominence MSCI Inc, a global index provider, has raised Taiwan’s weighting in one of its major indices and left the country’s weighting unchanged in two other indices after a regular index review. In a statement released on Thursday, MSCI said it has upgraded Taiwan’s weighting in the MSCI All-Country World Index by 0.02 percentage points to 2.25 percent, while maintaining the weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, at 20.46 percent. Additionally, the index provider has left Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index unchanged at 23.15 percent. The latest index adjustments are to
RSS