DBS Bank Ltd yesterday revised upward its GDP growth forecast for Taiwan to 5.5 percent this year, from the 5 percent it predicted in April, citing better-than-expected investments.
Imported capital goods advanced 63.5 percent in August, indicating that local manufacturers, especially those in the semiconductor industry, increased their investments, Singapore-based DBS economist Ma Tieying (馬鐵英) told a videoconference.
Data for last month had not been released, but the momentum in July and August should have remained intact last month, Ma said.
Photo: Lee Chin-hui, Taipei Times
“With annual growth of 7.4 percent, Taiwan’s economy in the second quarter was brisker than expected,” she said.
“We also boosted our forecast for the third quarter to 4 percent, from 3.8 percent predicted in April, due to strong investment and recovering consumption in July and August,” she added.
However, the bank slashed its growth estimate for the fourth quarter from 3 percent to 1.8 percent, as export growth might slow to a single-digit rate compared with an annul rise of 31 percent in the first eight months of this year, Ma said.
“Exports will likely face headwinds, as demand from China could decline due to the country’s power rationing, which would limit production of Chinese electronics companies,” she said. “China is the largest market in terms of exports of intermediate electronics from Taiwan.”
Taiwan’s exports to China, including Hong Kong, have increased at declining rates for five months in a row, from 35 percent annual growth in March to 16 percent in August, she said.
Taiwan’s exports to Southeast Asia also slowed last month, with nations in the region reporting COVID-19 outbreaks that interrupted production and reduced import demand, Ma said.
“These negative factors have not fully been reflected on Taiwan’s economy and might become more obvious in the fourth quarter,” Ma said. “In an even worse scenario, these factors could continue existing and slowing the local economy in the first quarter next year.”
DBS Bank’s 5.5 percent growth forecast is lower than the 5.88 percent predicted by the Directorate-General of Budget, Accounting and Statistics (DGBAS).
The bank predicted 2.8 percent growth next year, also lower than the DGBAS’ 3.69 percent projection.
The central bank would stay put this quarter, as the labor market has not improved much, Ma said.
However, it might raise its policy rates in the second quarter of next year at the earliest, if employment improves, she 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
TECH WINNERS: Taiwan and South Korea reported robust trade, which suggests that they have critical advantages in the rapidly expanding AI supply chain, an official said Exports last month surged to a new high, as booming demand tied to artificial intelligence (AI) infrastructure fueled shipments of advanced technology components, underscoring the nation’s pivotal role in the global semiconductor supply chain. Outbound shipments climbed to US$80.18 billion, the highest ever for a single month, rising 61.8 percent from a year earlier and marking the 29th consecutive month of growth, the Ministry of Finance said yesterday. “The surge was driven primarily by global investment in AI infrastructure,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said. The mass production of next-generation AI computing systems has accelerated procurement across the semiconductor supply
RSS