Taiwan’s economy is likely to expand 3.5 to 4 percent next year, Fubon Financial Holding Co (富邦金控) said yesterday, adding that the situation would depend on the effectiveness of COVID-19 vaccines and their delivery worldwide.
Fubon Financial’s base-case scenario assumes that an effective COVID-19 vaccine would be developed by the end of June next year, but would not be distributed around the globe due to allocation issues or would be rejected by US citizens, chief economist Rick Lo (羅瑋) told an economic forum in Taipei.
In that case, the COVID-19 pandemic would be unlikely to slow down, since there would be no herd immunity as people would not get vaccinated, Lo said.
Photo courtesy of Fubon Financial Holding Co
Taiwan’s GDP growth, which is forecast to grow at least 2 percent year-on-year this year, would continue growing next year, with an expected gain of 3.5 percent in the base-case scenario, as the spread of the novel coronavirus has been curbed domestically and local technology firms are to benefit with more companies digitalizing their businesses, he said.
China’s economy is likely to register an annual increase of 7.8 percent, followed by annual rises of 5 percent in Europe, 3.7 percent in the US and 2.3 percent in Japan, Lo said.
A more positive scenario assumes that a viable vaccine would be developed by the end of the second quarter of next year and distributed worldwide by the end of the third quarter, which would raise US economic growth to 4.5 percent, with other countries benefiting as well, he said.
Taiwan’s economy would also benefit from improvement abroad and would likely report an annual gain of 4 percent, Lo said.
“Given that the Directorate-General of Budget, Accounting and Statistics on Friday predicted an annual rise of 3.83 percent for Taiwan’s economy next year, I think the agency’s optimism might fall between our two scenarios,” Lo said.
The worst-case scenario — to which Lo gave a 10 percent likelihood of materializing, compared with the base-case scenario’s 50 percent and the second scenario’s 40 percent — would be coronavirus infections continuing to rise next year, despite the development of a vaccine, and Taiwan’s economy growing 2.4 percent annually, he said.
The central bank would keep its benchmark rates unchanged next year in all three scenarios, and US-China trade tensions would stabilize, as it would not be US president-elect Joe Biden’s priority to have trade talks with China, he said.
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
RSS