Academia Sinica yesterday upgraded its GDP growth forecast for Taiwan this year to 4.23 percent from a previous estimate of 3.88 percent in July, citing higher contributions from private investment driven by demand for technology.
As momentum in private investment and external demand are expected to remain strong next year, the institute forecast GDP would expand 3.1 percent on an annual basis.
However, if US president-elect Donald Trump, who is to take office next month, implements tariff protection policies it might have a negative impact on the global economy, Academia Sinica Institute of Economics adjunct research fellow Lin Chang-ching (林常青) said.
Photo: Hsu Tzu-ling, Taipei Times
In addition, as the US Federal Reserve announced last week that it might slow down its rate cut trajectory, the global financial environment might become unstable, Lin said.
He also said that China’s economic recovery faces grave challenges in the new year. If the US implements tariff policies and adjusts foreign exchange rates, it might negatively affect Asian currencies and impact the pace of recovery in China.
The institute’s economic growth forecast came after the central bank last week revised upward its estimates to 4.25 percent for this year and 3.13 percent next year.
The Directorate-General of Budget, Accounting and Statistics last month said its growth predictions were 4.27 percent for this year and 3.29 percent next year.
On a positive note, Taiwan might see considerable opportunities in artificial intelligence (AI) applications next year, Lin said.
As applications such as drones, robots and low-orbit satellites are already booming, it remains to be seen whether there would be further breakthroughs in AI next year, he said, adding that the institute has raised its private investment growth forecast to 4.70 percent for this year and 5.46 percent next year, thanks to demand for AI, low-carbon development and industrial automation.
Robust demand for AI applications and high-performance computing devices also led the institute to maintain its annual growth forecast of 9.17 percent for real goods and service exports this year and 6.53 percent next year.
Despite positive factors such as wage growth, stock market rallies and travel demand, a higher comparison base is expected to limit growth in private consumption to 2.68 percent this year and 2.02 percent next year, lower than the 2.09 percent forecast by the DGBAS, the institute said.
Academia Sinica is less optimistic than other research institutes on inflation as it forecast that the consumer price index would register annual growth of 2.02 percent next year, following 2.19 percent this year, making it the only institute that expects the inflationary gauge to exceed the central bank’s 2 percent target.
In addition, the institute citing a survey warned that rent hikes would become a major source of pressure for high inflation, given that 24.3 percent of landlords have increased rents over the past three years and about 30 percent plan to do so in the next one to two years.
SEE EDITORIAL ON PAGE 8
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
Some robotaxi passengers were left stranded in the middle of fast-moving traffic in a major Chinese city after their driverless vehicles stopped running, according to police and media reports on Wednesday. A preliminary investigation indicates more than 100 robotaxis came to a halt because of a “system malfunction,” police in the city of Wuhan said in a statement, without elaborating. No injuries were reported. One passenger told Chinese media that their robotaxi stopped after turning a corner. An instruction on a screen read: “Driving system malfunction. Staff are expected to arrive in 5 minutes.” After no one showed up, the passenger pushed
Taiwan Power Co (Taipower, 台電) yesterday said it plans to resume operations at two coal-fired power generators for three months to boost security of electricity supply as liquefied natural gas (LNG) supply risks are running high due to the Middle East conflict. The two coal-fired power generators are at Mailiao Power Plant in Yunlin County’s Mailiao Township (麥寮). The plant, operated by Formosa Plastics Group (台塑集團), supplied electricity to Taipower’s power grid until the end of last year. Taipower’s decision came about one month after Minister of Economic Affairs Kung Ming-hsin (龔明鑫) on March 10 said that the nation had no imminent
RSS