Cathay Financial Holding Co (國泰金控) yesterday adjusted upward its forecast for the nation’s GDP growth this year from 3 percent to 5.8 percent, citing robust growth momentum seen so far this year, driven by artificial intelligence (AI)-related exports and investment demand.
As the situation in the Middle East remains fluid, the probability of GDP growth this year falling to between 3 percent and 8 percent is about 80 percent, National Central University economics professor Hsu Chih-chiang (徐之強) told a news conference in Taipei.
Hsu heads a research team commissioned by Cathay Financial. The team’s previous forecast was an 80 percent probability that the economy would expand between 1.5 percent and 4.5 percent in the year.
Photo: CNA
The Directorate-General of Budget, Accounting and Statistics last month raised its GDP growth forecast to 7.71 percent for this year, from its November estimate of 3.54 percent. That forecast reflected the effect of strong exports seen earlier this year, but was made before the Middle East war started with US and Israeli attacks on Iran about two weeks ago.
International oil prices have risen by more than 40 percent since then, Hsu said. Based on the research team’s model, if the 40 percent increase in oil prices continues for more than one quarter, Taiwan’s economic growth would decline by about 1.2 percentage points, he said.
The research team forecast a 60 percent probability that Taiwan’s economic climate in the second quarter could shift from “bright,” meaning stable growth, to “cloudy,” implying weakening, if the war in the Middle East persists, he said.
The research team also revised its inflation forecast slightly higher to 1.8 percent, from 1.6 percent, reflecting uncertainty surrounding global oil prices and potential passthrough effects on importation costs, as well as potential price hikes on IC products, Hsu said.
The central bank is expected to keep its policy rates unchanged at its quarterly board meeting on Thursday, as the consumer price index grew just 1.23 percent on average in the first two months of this year, he said.
Overall, five major factors could affect Taiwan’s economic outlook this year, including geopolitical tensions in the Middle East, US tariff policies, companies building out AI infrastructure, the new US Federal Reserve chairman’s policy stance, and China’s fiscal and monetary policies, Hsu said.
Netherlands-based semiconductor equipment supplier ASML Holding NV yesterday said that it is planning to hire an additional 1,000 people in Taiwan this year in response to growing demand from clients. ASML had previously planned to recruit 600 people this year, but that the plan has been adjusted upward, ASML vice president and ASML Taiwan general manager Grace Wang (汪佳慧) told reporters. ASML has a workforce of more than 4,500 in Taiwan, accounting for about 10 percent of its global total, Wang said. This year’s recruitment campaign would focus on adding people in the customer support, manufacturing and supply chain domains to assist ASML
Starlux Airlines Co (星宇航空) today unveiled a long-haul network expansion plan at a shareholders’ meeting in Taipei, including direct flights to Barcelona, Spain, and Zurich, Switzerland, as well as a service connecting Taipei, Sydney and New Zealand. Starlux is to become the first Taiwanese carrier to offer non-stop services to the two European cities, while the inaugural oceanic route is expected to expand transit opportunities within the Australia-New Zealand market, Starlux said. Flight services to Chicago, Dallas, Washington and New York are under evaluation, the airline added. Prior to the shareholders’ meeting, the airline earlier this year announced that it would be
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
Nvidia Corp yesterday announced that CEO Jensen Huang (黃仁勳) would attend an employee meeting in Taipei tomorrow to celebrate the launch of the company’s Taiwan headquarters project. Huang would attend a gathering at the site of Nvidia’s planned headquarters in Beitou Shilin Technology Park (北投士林科技園區), the company said in a statement. After arriving in Taiwan on Saturday last week, Huang told reporters that he plans to meet with Quanta Computer Inc (廣達) chairman Barry Lam (林百里) and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman C.C. Wei (魏哲家), and would attend the groundbreaking ceremony for Nvidia’s Taiwan headquarters tomorrow. Nvidia has not yet applied
RSS