Tue, Jul 16, 2024 page12

• DBS raises GDP forecast for Taiwan to 4.2 percent

  • By Crystal Hsu / Staff reporter
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  Singapore-based DBS Bank yesterday raised its forecast for Taiwan’s GDP growth this year to 4.2 percent, from the 3.5 percent it predicted in April, as the nation’s exports are expected to improve, aided by demand for artificial intelligence (AI) applications.

  DBS senior economist Ma Teiying (馬鐵英) told a news conference in Taipei that she was aware the projection is higher than most forecasts, including the Directorate-General of Budget, Accounting and Statistics’ 3.94 percent.

  Ma attributed her optimism to a robust recovery and the arrival of the high sales season for technology products.

  

  Taipei 101, left, Taiwan’s tallest skyscraper, is pictured in Taipei on May 17.

  Photo: AFP

  Growth momentum would pick up quarterly, but slow year-on-year due to a base comparison effect, she said.

  Generative AI is fueling demand for high-performance AI chips in data centers, as US technology titans Amazon Web Services, Alphabet Inc’s Google, Microsoft Corp and others spend lavishly on developing AI-optimized chips to enhance operational efficiency and reduce costs in delivering AI-based services, Ma said.

  AI integration in PCs and smartphones would also present new opportunities for commonly used applications, she said, adding that AI-capable laptops would make up 13 percent of the market this year and soar to 74 percent by 2027.

  

  DBS Bank vice president Chen Yu-chia, left, and senior economist Ma Teiying pose for a photograph in Taipei yesterday.

  Photo: Wu Hsin-tien, Taipei Times

  At the same time, AI-enabled smartphones would comprise 11 percent of shipments this year and spike to 43 percent in the next three years, she said.

  World Semiconductor Trade Statistics recently revised its forecast for global semiconductor market growth to 16 percent year-on-year, up from its previous estimate of annual growth of 13.1 percent, citing robust advancements in memory and logic chip segments, Ma said, adding that the pace of expansion would reach 12.5 percent next year.

  Gartner Inc has also projected that global revenue from AI chips would swell 33 percent year-on-year this year to US$71 billion, she said.

  However, recovery in non-tech manufacturing sectors would continue to lag, as China’s soft private consumption and property market have dampened demand for imports of consumer goods, Ma said.

  In addition, cross-strait tensions have slowed Taiwan’s exports of petrochemicals, textiles, metals, machinery and transportation equipment, she said.

  China remains Taiwan’s largest export destination with a 30 percent share, despite efforts to diversify export markets.

  DBS stood by its 2.2 percent inflation estimate for Taiwan this year and described the central bank’s monetary policy as moderate, although carrying a tightening bias.

  The bullish property market might continue in the coming years on the back of economic improvement until the next negative technology product cycle, likely in 2026, Ma said.

  Healthy economic fundamentals might give the central bank room to tighten lending terms, if necessary, to cool the housing market, she said.
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