Taiwan’s economy would expand 3.4 percent this year as it slows down from last year’s COVID-19 pandemic-induced boom while keeping in line with historic trends, the Yuanta-Polaris Research Institute (元大寶華綜經院) said yesterday.
Ongoing inventory corrections are caused by overbooking during COVID-19 lockdowns, rather than a decline in global demand for goods and services, institute president Charles Yeh (葉銀華) said.
The corrections could end in the first quarter of next year, Yeh said.
Photo: Huang Tzu-hsun, Taipei Times
“Taiwan’s GDP would put up a normal, acceptable growth of 3.4 percent this year, compared with a 12-year-high of 6.57 percent last year,” as COVID-19-induced demand for remote working and learning wanes, he said.
As local manufacturers would need four quarters to digest excess inventory, Taiwan’s economic growth would weaken to 2.75 percent next quarter and 1.65 percent in the first quarter of next year before bouncing back, Yeh said.
Exports of non-tech products slipped into the contraction zone last month and might encounter further headwinds as central banks tighten their monetary policies to curb inflation, he added.
The scenario would allow domestic demand to replace exports as the main growth driver, the institute said.
Private investment is expected to increase 6.89 percent this year, propped up by robust global demand for chips used in smartphones, laptops, vehicles, data centers, and artificial intelligence and Internet of Things applications, it said.
Private consumption would rise 3.19 percent this year, with an expected gain of 6.51 percent this quarter and 2.95 percent in the fourth quarter, the institute said.
The projection assumes consumer spending returning to pre-pandemic levels — with people becoming used to living with the virus and authorities gradually lifting disease control measures, it said.
Inflationary pressures, a key threat to consumer spending, would climb 2.94 percent this year, suggesting a 3.01 percent pickup this quarter and a 2.49 percent rise in the fourth quarter, it said.
Consumer prices would soften below the 2 percent alert level to 1.69 percent next year, it said.
The forecast assumes the central bank would raise interest rates by another 0.125 percentage points today to tame inflation, much lower than the US Federal Reserve’s 0.75 percentage point rate hike, Yeh said.
Capital flight would persist as portfolio managers at home and abroad respond to Taiwan’s widening rate gap with the US, he said.
The local bourse and the New Taiwan dollar would be affected amid fund redeployment, he added.
The capital movements would not become uncontrollable and could turn around in the coming six months, Yeh said.
Apple Inc might make one out of four iPhones in India by 2025, JPMorgan & Chase Co analysts said yesterday, as the tech giant moves some production away from China, amid mounting geopolitical tensions and strict COVID-19 lockdowns in the country. JPMorgan expects Apple to move about 5 percent of iPhone 14 production from late this year to India, which is the second-biggest smartphone market in the world after China. It is also estimating that about 25 percent of all Apple products, including Mac, iPad, Apple Watch and AirPods, would be manufactured outside China by 2025 from 5 percent currently. The US company
HEADING SOUTH: The US company chose Kaohsiung as its site as more customers, partners and start-ups have expanded their operations to the southern city Qualcomm Inc yesterday inaugurated a new innovation center in Kaohsiung as it steps up efforts to foster local start-ups and a 5G technology ecosystem in the city, following in the footsteps of its local partners. The US chip company’s move fits the Kaohsiung City Government’s plan to build a semiconductor supply chain within the next five years, highlighted by Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) first chip plant in the city. TSMC plans to start building the factory by the end of this year, and to start production of 28-nanometer and 7-nanometer chips there in 2024. Qualcomm said it had been
SLUMPING DEMAND: Inventory has climbed by up to 12 weeks as suppliers are under mounting pressure to offload excessive reserves, a TrendForce report said The price of DRAM chips is expected to fall at a steeper rate of 13 to 18 percent next quarter, as high inflation continues to weigh on demand for consumer electronics, causing chip inventories to soar, market researcher TrendForce Corp (集邦科技) said yesterday. The downtrend in DRAM prices could extend from a quarterly decline of 10 to 15 percent in the third quarter, the Taipei-based researcher said. “Demand for consumer electronics continued to stagnate during the third quarter, which used to be a high demand season,” TrendForce said in a statement. “During the quarter, memorychip consumption and shipments both showed quarterly
GlaxoSmithKline (GSK) in July made its consumer health products division a separate entity as it transforms into a world-leading biopharmaceutical company. By uniting science, technology and talent, the company is aiming to prevent and treat diseases with innovative vaccines, specialty pharmaceuticals and general medicines. GSK’s headquarters annually invests NT$192 billion (US$6.07 billion) in research and development, focusing on immune science and advanced technologies in human genetics. GSK’s drug and vaccine development focuses on infectious diseases, HIV, oncology and immunology. Investing in clinical trial research each year, GSK also brings drug development to Taiwan. It cooperates with 17 medical institutes and research