Taiwan’s economy faces several major uncertainties, including slower growth in China, despite receiving a boost from emerging technologies, domestic investments and consumption in the second half of this year, the central bank said in a report on Thursday.
The central bank is concerned that slower GDP growth and weakening domestic demand in China could have spillover effects that hurt economies like Taiwan, which sell a large volume of goods to the Chinese market, the report said.
China’s GDP in the second quarter grew 4.7 percent from a year earlier, below an earlier market estimate of 5.1 percent, the slowest increase since the first quarter of last year.
Photo: Bloomberg
The second-quarter GDP growth also moderated from 5.3 percent in the first quarter.
To mitigate the impact of a supply glut amid weaker domestic demand, China could intensify efforts to sell its goods in global markets, which would potentially exacerbate competition with other export-oriented economies such as Taiwan, the report said.
China’s escalating trade tensions with the US and Europe could also speed up the pace of restructuring in global supply chains and lead to a fragmented global economy, it said.
In such unfavorable circumstances, Taiwanese firms are expected to intensify their efforts to diversify their foreign assets while reducing spending within Taiwan, which could affect the country’s exports and private investments, the central bank said.
Other uncertainties facing Taiwan include a divergence in monetary policies among global central banks, as the US Federal Reserve and the European Central Bank have begun a rate cut cycle.
However, Japan is moving in the opposite direction by raising rates to mitigate pressure from imported inflation, which is expected to influence fund flows, sending ripples through the global stock and foreign exchange markets that would eventually affect the global economy, the report said.
In addition, global trade and financial markets could be haunted by the US presidential election in November, while lingering conflicts in the Middle East and a growing crisis in the Red Sea could hinder global supplies in energy and commodities, which is likely to boost inflationary pressure, it said.
Extreme weather, measures to achieve net zero emissions and aging societies would also exacerbate inflation and produce more uncertainties in the global economy, it added.
On the same day, the central bank raised its forecast for GDP growth this year to 3.82 percent, up from 3.77 percent estimated in June.
It anticipates growth would reach 3.08 percent next year.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
RSS