Standard Chartered Bank Taiwan (渣打台灣銀行) yesterday raised its forecast for the nation’s GDP growth this year from 4.4 percent to 5 percent, as local firms continue to benefit from strong demand for technology products amid an improving global economy.
The upward revision came despite consumer spending taking a hit from social distancing measures implemented to combat a COVID-19 outbreak, the bank said.
“The level 3 alert nationwide wreaks havoc on service providers, but has little impact on the manufacturing industry,” the backbone of exports, Taipei-based economist Tony Phoo (符銘財) said in a report.
Photo: Lee Chin-hui, Taipei Times
Phoo said he is upbeat that the upcoming release of new smartphones by global technology brands — particularly Apple Inc — would increase production at local suppliers.
Taiwan is home to the world’s top contract makers of chips, camera lenses, battery packs, flat panels and other critical components used in smartphones, laptops, tablets, wearable devices and peripherals.
Inventory demand explained why the sole chip supplier for the iPhone, Taiwan Semiconductor Manufacturing Co (台積電), posted record-high revenue of NT$148.47 billion (US$5.3 billion) for last month and is expected to give an upbeat guidance at an earnings conference today.
New product launches, as well as digital transformation by global corporations and organizations, have led to chip shortages and an influx of export orders, Phoo said, adding that there are risks of overbooking and order cancelations.
Domestically, the COVID-19 outbreak is driving up unemployment and consumer confidence would remain weak until vaccination rates reach safe levels, he said.
The government is seeking to mitigate the pain by introducing assorted relief measures and is increasingly gaining the upper hand in curbing the outbreak, he added.
The bank expects the consumer price index to increase 1.6 percent this year, driven mainly by a sharp increase in transportation costs.
Airfares and fuel prices have soared by double-digit percentage points for several consecutive months, government data showed.
In related news, the Taiwan Research Institute (台灣綜合研究院) yesterday forecast GDP growth of 5.12 percent for this year.
Major economies are emerging from the COVID-19 pandemic, a trend that bodes well for global trade and the nation’s exports, the institute said.
Private consumption, while sluggish at present, still has a chance of staging a comeback next quarter and finishing the year with a 2.39 percent increase if authorities can end the COVID-19 outbreak later this quarter, the institute added.
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