Core consumer prices would top the list of concerns when the central bank revisits its monetary policy next month, as headline inflation has held steady while core readings continue to rise, Governor Yang Chin-long (楊金龍) said yesterday.
Yang shared his views on inflation and other economic issues while taking questions from lawmakers during a legislative hearing in Taipei, ahead of the central bank’s next board meeting on June 15.
Yang said his biggest concern is the core consumer price index (CPI), which advanced 2.72 percent last month, although headline inflation stayed unchanged at 2.35 percent.
Photo: CNA
Higher core CPI readings suggest sticky inflationary pressures ahead, Yang said, as the measure excludes volatile items such as fuel and vegetable prices.
If core CPI climbs higher, the central bank could raise interest rates again to tame inflation, although it would also take the nation’s economic health into consideration, he said.
Taiwan’s export-oriented economy contracted 3.02 percent during the January-to-March period and is expected to remain soft this and next quarter, as global inflation and monetary tightening slows demand for electronic components, the nation’s main export driver.
Taiwan has felt the pinch of economic uncertainty induced by aggressive interest rate hikes in the US and Europe, Yang said, adding that a recovery would take place in the fourth quarter, if not next quarter.
“Much depends on when inventory adjustments will end,” Yang said.
National Development Council Minister Kung Ming-hsin (龔明鑫) on Tuesday said that exports continue to disappoint, in line with conservative guidance from major tech firms that inventory corrections would persist into next quarter.
The Directorate-General of Budget Accounting and Statistics is on Friday expected to trim its forecast for Taiwan’s GDP growth this year, after exports and private investment fared weaker than expected.
Yang attributed Taiwan’s inflationary pressures to conspicuous rises in food, entertainment and travel charges in the wake of the government’s removal of border controls and other COVID-19 restrictions.
Dining costs, once risen, have little chance of falling before the year-on-year comparison effect fades, Yang said, responding to comments the central bank has failed to rein in inflation.
Taiwan’s inflation is moderate when compared with other countries, he said.
Yang said the US Federal Reserve is widely expected to end its rate hike cycle next month after inflation in the US fell below 5 percent and is expected to drop to the Fed’s 2 percent target by 2025.
The chance of further rate hikes is small against that backdrop, he said.
REASSURANCE: The company, which installed new equipment in its Taichung plant, said that it would produce 1-gamma nanometers node DRAMs in Taiwan in 2025 US-based memorychip supplier Micron Technology Inc on Friday said that it would start producing its most advanced DRAM exclusively in Taiwan in 2025. Micron said that it would mass produce chips using its advanced 1-gamma process node DRAM in Taiwan, ahead of any other production site worldwide. The company installed cutting-edge extreme ultraviolet (EUV) lithography production equipment in its A3 fab in Taichung last year. The 1-gamma process — its third-generation 10 nanometer-class node — was jointly developed by Micron’s research and development (R&D) teams in Taiwan and Japan. Micron on Thursday said it would invest up to US$3.6 billion in Japan. A Ministry
MARKET GAP: If China stops buying chips from US firm Micron, they might turn to competitors such as Nanya and South Korean suppliers, researchers said Nanya Technology Corp (南亞科技) shares rallied nearly 4 percent during early trading yesterday amid optimism that the nation’s biggest DRAM chipmaker would benefit from China’s latest ban on purchasing memory chips from Micron Technology Inc. The restrictions are widely considered a result of an escalating technology dispute between the US and China. Chinese firms might shift orders to non-US suppliers such as Nanya Technology and South Korean memory chipmakers Samsung Electronics Co and SK Hynix Inc. The Cyberspace Administration of China on Sunday night said that its review found that Micron’s memory chips pose serious network security risks to the country’s critical
SECURITY RISK: Chinese companies could respond to the announcement by moving away from all products made by the US firm, diverting business toward Korean rivals China delivered the latest salvo in an escalating semiconductor war with the US, announcing that Micron Technology Inc products have failed to pass a cybersecurity review in the country. Operators of key infrastructure in China should not buy the company’s goods, the Cyberspace Administration of China (CAC) said in a statement on Sunday, adding that it found “relatively serious” cybersecurity risks in Micron products sold in China. The components caused “significant security risks to our critical information infrastructure supply chain,” which would affect national security, it said. The results come more than a month after China announced an investigation on imports from
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) senior vice president of business development Kevin Zhang (張曉強) told reporters yesterday that talks over a possible plant in Germany are continuing and that the earliest decision would be in August. “I don’t want to get into the politics side of the thing, but I do think that there is a need for us to provide our customers with a diverse supply,” Zhang said, adding that Europe is a “very significant geography given the customer base ... [and] the demand.” Zhang did not confirm the size of subsidy or cost of the potential project or
RSS