The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday cut its forecast for GDP growth for this year to 3.04 percent, down from the 3.56 percent it projected in April, as a global economic slowdown, especially in China, affects exports.
However, academics who joined the discussion challenged the institution’s new forecast, saying it would be difficult — if not impossible — for the economy to expand 3 percent this year and the government should focus its resources on improving domestic demand.
Exports, which drove more than 70 percent of GDP growth in the first quarter, are predicted to grow 3.88 percent this year, sharply down from a prior estimate of 6.26 percent growth, the CIER report showed.
Photo: CNA
“The second half may put up a weaker performance compared with the first half owing to a higher base,” CIER researcher Peng Su-ling (彭素玲) told a media briefing.
GDP growth likely reached 3.11 percent in the first half of the year, but could decelerate to 2.97 percent for the rest of the year, with major economies proving to be weaker than expected, Peng said.
Slowing global growth is unfavorable to Taiwanese exports, which contracted 7.1 percent in the first half, the report said.
Taiwanese exports to major trading partners, notably China and Southeast Asian nations, are declining, while South Korea is gaining market share, the report said.
The trend suggests declining competitiveness among local exporters, Peng said.
To make things worse, China is reducing its dependence on imports of electronic components from Taiwan, as it builds up its own supply chain as part of its economic restructuring, Peng said.
On the currency front, the New Taiwan dollar has risen 2.67 percent versus the US dollar so far this year, while the yen and the won have retreated 1.89 percent and 1.5 percent respectively over the same period, Peng said.
A strong NT dollar is eroding exporters’ bottom lines, he said.
Government agencies are looking for ways to boost the nation’s exports and the economy as a whole, with some academics suggesting establishing a sovereign wealth fund to help finance social welfare spending and others calling for the establishment of a more investment-friendly environment.
Bills Finance Association (票券公會) chairman Hermann Wu (吳正慶) said that he and his peers doubt the economy can grow by 3 percent this year.
National Central University economics professor Chiou Jiunn-rong (邱俊榮) suggested that the government focus its efforts on strengthening domestic demand to support economic growth.
However, he added that the government gives too much importance to GDP figures.
“GDP growth may not improve or reflect the well-being of the public the way a wage increase does,” Chiou said.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
THUGGISH BEHAVIOR: Encouraging people to report independence supporters is another intimidation tactic that threatens cross-strait peace, the state department said China setting up an online system for reporting “Taiwanese independence” advocates is an “irresponsible and reprehensible” act, a US government spokesperson said on Friday. “China’s call for private individuals to report on alleged ‘persecution or suppression’ by supposed ‘Taiwan independence henchmen and accomplices’ is irresponsible and reprehensible,” an unnamed US Department of State spokesperson told the Central News Agency in an e-mail. The move is part of Beijing’s “intimidation campaign” against Taiwan and its supporters, and is “threatening free speech around the world, destabilizing the Indo-Pacific region, and deliberately eroding the cross-strait status quo,” the spokesperson said. The Chinese Communist Party’s “threats