The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday cut its forecast for Taiwan’s GDP growth this year to 2.58 percent, down 0.33 percentage points from its previous projection, saying that global inflation and monetary tightening would slow foreign trade and private investment.
High inflation would affect the global economy, curtailing demand for goods and services, which would have a negative impact on Taiwan’s exports, TIER president Chang Chien-yi (張建一) said.
Tech and non-tech firms would struggle to digest a glut of inventory in the first half of this year, and it remains to be seen whether demand will recover afterward, Chang said, adding that the global economic landscape looks murky in light of the Ukraine war and other uncertainties.
Photo courtesy of the Taiwan Institute of Economic Research
Exports are expected to increase 1.13 percent this year, while imports would grow 1.25 percent — a downward revision of 1.22 percentage points and 0.54 percentage points respectively, the think tank said.
US technology titans Google, Microsoft Corp, Amazon.com Inc and other companies have laid off more than 70,000 employees, as digital advertisers are spending less and rising inflation is curbing consumer expenditure.
TIER said that private consumption would support Taiwan’s economy this year, as it is expected to increase 5.95 percent, up 1.63 percentage points from its prediction in November last year.
Relaxed COVID-19 restrictions have been fueling a quick recovery for service-oriented businesses, especially in the hospitality and tourism sectors, the institute said.
Private investment would lend limited support to domestic demand, and is expected to increase 2.3 percent from last year, as inventory corrections appear bigger and are lasting longer than expected, prompting firms to become conservative about capital spending, it said.
However, business confidence among local manufacturers rose 0.81 points last month to 85.16, TIER found in a separate survey.
TIER Macroeconomic Forecasting Center director Gordon Sun (孫明德) attributed the uptick to China ditching its “zero COVID” policy, saying it would speed up the recovery in economic activity, despite soaring COVID-19 cases in the short term.
That explains why local suppliers of petrochemical, plastic steel, and machinery products are expecting business to improve in the coming six months and some have benefited from rush orders, Sun said.
Chang said he was concerned that rush orders might not continue, adding that more observation is needed before forecasting a trend.
As for the tech sector, a turnaround might not take place until the second quarter of this year, he said.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS