Economic growth is expected to moderate to 2.51 percent next year after expanding by an estimated 3.01 percent this year, as global demand for Taiwanese exports further slows amid high inflation and drastic monetary tightening, the Taiwan Research Institute (TRI, 台灣綜合研究院) said yesterday.
“The global economic scene looks pessimistic going forward, as the war in Ukraine drove up global fuel prices and prompted major central banks to hike interest rates to tame inflation,” institute founder Liu Tai-ying (劉泰英) said.
The twists have dashed hopes of a continued recovery from the COVID-19 pandemic this year, as evidenced by the fast retreat in the nation’s exports, the New Taipei City-based institute said.
Photo: Hsu Tzu-ling, Taipei Times
The growth projections for this year and next year made TRI the most conservative among major local think tanks.
The world is now heading toward a recession, which is unfavorable to Taiwanese exporters of electronics used in smartphones, notebook computers, wearables, TVs and vehicles, it said.
That means private consumption would take over as the main driver of growth, expanding 5.14 percent next year after estimated growth of 3.27 percent this year, institute president Wu Tsai-yi (吳再益) said.
Private investment would increase a modest 2.48 percent, from an impressive 7.24 percent gain this year, as major companies cut or postpone capital expenditure to deal with order cancelations and soft end-market demand, Wu said.
Both tech and non-tech manufacturers are giving top priority to inventory adjustments, which might need more time than expected, as downside risks abroad heighten, he said.
Interest rates would remain high even if global central banks were to slow the pace of tightening, the institute said, adding that China’s lingering COVID-19 restrictions would continue to inhibit economic activity even though it has displayed some flexibility.
China’s slowdown is to blame for the double-digit percentage-point decline in Taiwan’s exports last month, the Ministry of Finance said last week, adding that it might not improve this quarter and in the first half of next year.
The institute is expecting a 1.96 percent increase in consumer prices next year, below the central bank’s target of at most 2 percent.
Exports of goods and services are forecast to grow 3.37 percent next year, slower than imports’ projected increase of 5.44 percent, the institute said.
The New Taiwan dollar would trade at an average of NT$30.79 percent against the US currency, weakening from NT$29.83 this year, it predicted.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the