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.
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS