The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its forecast for the nation’s GDP growth this year to 1.76 percent, from its previous estimate of 1.33 percent, saying exports and private consumption have staged a V-shaped recovery from the COVID-19 pandemic in the second half of the year.
“The upgrade aims to reflect the fast recovery in Taiwan’s exports and domestic demand,” CIER president Chang Chuang-chang (張傳章) told a media briefing.
The Taipei-based think tank said the economy might have expanded 2.77 percent last quarter — emerging from a 0.78 percent decline in the second quarter — and would grow 2.55 percent this quarter.
Photo: Wu Chia-ying, Taipei Times
The showing is impressive, making Taiwan one of the few economies reporting growth as COVID-19 infections surge in many parts of the world, threatening economic activity, the institute said.
Local technology firms have benefited from strong demand for 5G deployment and electronic devices required for a low-contact economy as well as rush orders and order transfers amid US-China tensions, CIER said.
China’s Huawei Technologies Co (華為) avidly stockpiled electronics inventory ahead of the Sept. 15 sales ban imposed by Washington due to national security concerns.
Outbound shipments might have increased 3.86 percent last quarter and would likely gain 2.59 percent in the current quarter from their year-ago levels, CIER said.
Imports would be soft for the whole of this year, due to lower fuel and raw material prices, allowing net external demand to contribute 0.82 percentage points to GDP growth this year, it said.
Domestically, private investment is likely to rise 2.55 percent from last year, aided by companies returning from China, and efforts by local tech firms to expand and maintain technology leadership, CIER said.
The government and public enterprises would lend support by raising their investments by 10.88 percent and 26.39 percent year-on-year respectively, it said.
Active investments would offset weak private consumption, a key GDP component that would stay in negative territory this year, despite a rapid recovery from the third quarter onward, it said.
CIER expects the New Taiwan dollar to trade at an average of NT$29.76 against the US dollar for the year, compared with yesterday’s closing rate of NT$28.932.
Central bank Governor Yang Chin-long (楊金龍) last week told lawmakers that the NT dollar would likely trade above NT$29 per US dollar in the coming six to 12 months, bolstered mainly by strong exports.
CIER forecast the unemployment rate to hover at about 3.99 percent and consumer prices to contract 0.2 percent this year, with the virus infections, US elections and other geopolitical risks creating uncertainty.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by