The government’s business climate monitor last month was “red” for the first time in a decade, as the economy is heating up due to strong demand for tech and non-tech products, as well as a low comparison base last year.
The monitor gained 3 points to 40, the highest in 32 years. Officials shrugged off bubble and inflation concerns, saying the “red” signal came on the back of solid economic fundamentals.
“Robust exports, private investment and consumer spending accounted for the boom that had nothing to do with bubbles or drastic inflation,” National Development Council (NDC) Deputy Minister Kao Shien-quey (高仙桂) told a media briefing.
Photo: CNA
The council uses a five-color system to portray the nation’s economic state, with “green” indicating steady growth, “red” suggesting overheating and “blue” signaling a recession. Dual colors indicate a transition.
Many have voiced concerns about potential economic bubbles, as COVID-19 infections remain high in many parts of the world, while some research bodies have warned that central banks could reverse loose monetary policies early to rein in inflation risks.
The government has been closely watching international raw material price movements and believes that the price hikes so far are benign, Kao said.
Although Taiwan’s GDP growth this year is forecast to reach 4.64 percent, the central bank last week said it would stand by its current accommodative monetary policy in line with its global peers for fear that a rate hike would attract hot money.
NDC Minister Kung Ming-hsin (龔明鑫) had earlier told lawmakers that the government might consider tightening measures if the boom extends into the second half of this year.
Isolated “red” signals pose no threat, Kung said.
The COVID-19 pandemic started in January last year, weakening economic growth over the following several months, but things started to improve in the second half.
The index of leading indicators, which aims to portray the economic situation for the next six months, picked up 0.52 percent to 106.69, as gauges on imports of semiconductor capital equipment, manufacturing business confidence and labor entry rates all pointed upward, the council said.
However, readings on export orders and new construction floor areas slipped from one month earlier due to unfavorable holiday effects.
The index of coincident indicators, which reflects the current economic state, grew 1.35 percent to 106.8, with markers such as power usage, retail sales, manufacturing sales and restaurant revenue all gaining value due to business improvement, the council said.
Non-farm payrolls and exports declined from a month earlier, as there were fewer working days last month.
Major tech firms are upbeat about their business this month and beyond, lending support to the economic boom.
Taiwan’s rapidly aging population is fueling a sharp increase in homes occupied solely by elderly people, a trend that is reshaping the nation’s housing market and social fabric, real-estate brokers said yesterday. About 850,000 residences were occupied by elderly people in the first quarter, including 655,000 that housed only one resident, the Ministry of the Interior said. The figures have nearly doubled from a decade earlier, Great Home Realty Co (大家房屋) said, as people aged 65 and older now make up 20.8 percent of the population. “The so-called silver tsunami represents more than just a demographic shift — it could fundamentally redefine the
The US government on Wednesday sanctioned more than two dozen companies in China, Turkey and the United Arab Emirates, including offshoots of a US chip firm, accusing the businesses of providing illicit support to Iran’s military or proxies. The US Department of Commerce included two subsidiaries of US-based chip distributor Arrow Electronics Inc (艾睿電子) on its so-called entity list published on the federal register for facilitating purchases by Iran’s proxies of US tech. Arrow spokesman John Hourigan said that the subsidiaries have been operating in full compliance with US export control regulations and his company is discussing with the US Bureau of
Businesses across the global semiconductor supply chain are bracing themselves for disruptions from an escalating trade war, after China imposed curbs on rare earth mineral exports and the US responded with additional tariffs and restrictions on software sales to the Asian nation. China’s restrictions, the most targeted move yet to limit supplies of rare earth materials, represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the artificial intelligence (AI) boom. They prompted US President Donald Trump on Friday to announce that he would impose an additional
Pegatron Corp (和碩), a key assembler of Apple Inc’s iPhones, on Thursday reported a 12.3 percent year-on-year decline in revenue for last quarter to NT$257.86 billion (US$8.44 billion), but it expects revenue to improve in the second half on traditional holiday demand. The fourth quarter is usually the peak season for its communications products, a company official said on condition of anonymity. As Apple released its new iPhone 17 series early last month, sales in the communications segment rose sequentially last month, the official said. Shipments to Apple have been stable and in line with earlier expectations, they said. Pegatron shipped 2.4 million notebook
RSS