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.
CLIENTS’ RIGHTS: Banking Bureau Deputy Director-General Lin Chih-chi said the buyer and Citibank Taiwan would need to disclose changes to branch operations DBS Bank Taiwan (星展台灣), the local unit of Singapore-based DBS Group Holdings Ltd, has reportedly won a bid to acquire Citibank Taiwan Ltd’s (花旗台灣) consumer banking business, but the two companies declined to confirm the report yesterday. Citibank Taiwan’s consumer banking business is to be sold for about NT$60 billion (US$2.17 billion) to DBS Taiwan, the Chinese-language Economic Daily News reported on Sunday. DBS Taiwan and its parent company are expediting the negotiations with the seller’s US-based parent company, while other local bidders, including Fubon Financial Holding Co (富邦金控) and Cathay Financial Holding Co (國泰金控), have dropped their bids, the report said. Citibank
‘BULLISH YEAR AHEAD’: The contract chipmaker set a growth target of up to 29 percent, as it expects to outperform its peers in the semiconductor industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is planning to boost this year’s capital expenditure budget by about 46 percent to exceed US$44 billion, citing strong customer demand for advanced technologies used in high-performance computing (HPC) and 5G-related applications, the world’s largest contract chipmaker said yesterday. The plan marks a record spending for TSMC after the chipmaker budgeted US$30 billion for capacity expansions at home and overseas fabs last year. TSMC is planning to allocate about 80 percent of this year’s capital spending for advanced chip capacity expansion including 2-nanometer, 3-nanometer, 5-nanometer and 7-nanometer technologies. The chipmaker reiterated that it is on
Intel Corp yesterday said it has placed its first order with ASML Holding NV to purchase the semiconductor industry’s first TWINSCAN EXE: 5200 system, as the US chip giant aims to compete with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in advancing to 2-nanometer process technology. The Dutch semiconductor equipment maker’s TWINSCAN EXE:5200 system is an extreme ultraviolet (EUV) high-volume production system with a high numerical aperture (NA) that can produce 220 wafers per hour, more than the 150 wafers that its previous generation TWINSCAN EXE:5000 system can handle. ASML aims to launch the new system in 2024. ASML president and chief
Siltronic AG cast doubt on a planned US$5.3 billion takeover by GlobalWafers Co (環球晶圓), saying the German Ministry of Economic Affairs and Climate Action’s feedback so far was opaque and offered no clear resolution on how to win approval for the deal. During recent discussions, the companies did not receive any information as to whether and under which conditions a clearance for the takeover might be issued, the German company said in a regulatory filing on Friday following a news report on remedies the companies have offered. In the ministry’s view “in this case, a mitigation agreement is apparently not suitable
RSS