The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday trimmed its forecast for Taiwan’s GDP growth this year to 3.14 percent from the 3.29 percent it projected in November last year, as budget cuts are expected to curtail government expenditure and potential US tariff hikes raise uncertainty over global trade.
“Taiwan’s exports and private investment would remain robust on the back of expanding global investments in artificial intelligence [AI],” DGBAS Minister Chen Shu-tzu (陳淑姿) said.
The downward revision was also due to a high comparison base last year, when GDP growth was 4.59 percent, higher than 4.27 percent the agency had projected, Chen said.
Photo: Ritchie B. Tongo, EPA-EFE
GDP growth last quarter also fared stronger at 2.9 percent, beating the forecast by 1.06 percentage points, she said.
The high base exacerbates trade protectionism that is clouding the economic landscape internationally, while budget cuts by the legislature would affect government consumption and fixed investment, Chen said.
US President Donald Trump has threatened to impose tariffs of up to 100 percent on semiconductors, unfavorable for Taiwan’s chipmakers, which supply the bulk of the world’s chips.
Global trade is expected to grow 3.2 percent this year, slightly weaker than a 3.4 percent pickup last year, the DGBAS said, citing a report by the IMF.
Exports, a main growth driver for Taiwan, might expand 7.08 percent to US$508.6 billion, slowing from a 9.85 percent gain last year, it said.
However, rising demand for AI applications and high-performance computing would continue to bolster local firms in their supply chains, it said.
Lawmakers removed NT$39 billion (US$1.19 billion) from the central government’s budget for this year and froze an additional NT$63.6 billion, Chen said.
If the freezes remain, GDP growth might have difficulty staying above 3 percent, as the DGBAS would have to drop 0.2 to 0.3 percentage points from its prediction, Chen said.
Nevertheless, a stable labor market with wage increases would allow consumer spending to rise 2.12 percent, the DGBAS said.
At the same time, local semiconductor manufacturers are upgrading their processing technologies and packaging capacities to stay competitive and meet demand, it said.
The trend bodes well for private investment, which might grow 6.18 percent, an improvement of 0.61 percentage points from the previous forecast, the DGBAS said.
The aviation industry would also contribute to private investment, as demand for cross-border travel is rising, it said.
Consumer prices would return to within the central bank’s target range with an annual growth rate of 1.94 percent, the DGBAS added.
A subsidiary of a Hong Kong-based company that has lost control of two critical ports on the Panama Canal said it is seeking US$2 billion of compensation in damages from Panama over its “illegal” takeover of the ports. Panama Ports Co, a unit of Hong Kong’s CK Hutchison Holdings (長江和記實業), on Friday said in a statement that it is demanding the sum under international arbitration proceedings that it had already started. The Panamanian government last week seized control of the Balboa and Cristobal ports on each end of the Panama Canal, after the country’s Supreme Court declared earlier that a concession allowing
DETERRENCE: With 1,000 indigenous Hsiung Feng II and III missiles and 400 Harpoon missiles, the nation would boast the highest anti-ship missile density in the world With Taiwan wrapping up mass production of Hsiung Feng II and III missiles by December and an influx of Harpoon missiles from the US, Taiwan would have the highest density of anti-ship missiles in the world, a source said yesterday. Taiwan is to wrap up mass production of the indigenous anti-ship missiles by the end of year, as the Chungshan Institute of Science and Technology has been meeting production targets ahead of schedule, a defense official with knowledge of the matter said. Combined with the 400 Harpoon anti-ship missiles Taiwan expects to receive from the US by 2028, the nation would have
POSSIBILITIES EMERGE: With Taiwan’s victory and Japan’s narrow win over Australia, Taiwan now have a chance to advance if South Korea also beat the Aussies Taiwan has high hopes that the national baseball team would advance to the World Baseball Classic (WBC) quarter-finals after clinching a crucial 5-4 victory over South Korea in a nail-biting extra-inning game at the Tokyo Dome yesterday. Boosted by three home runs — two solo shots by Yu Chang (張育成) and Cheng Tsung-che (鄭宗哲) and a two-run homer by Stuart Fairchild — the triumph gave Taiwan a much-needed second victory in the five-team Pool C, where only the top two finishers would advance to the knockout stage in Miami, Florida. Entering extra innings with the game tied at four apiece, Taiwan scored
MISSION OF PEACE: The foreign minister urged Beijing to respect Taiwan’s existence as an independent nation, and work together to ensure peace and stability in the region Minister of Foreign Affairs Lin Chia-lung (林佳龍) yesterday rejected Chinese Minister of Foreign Affairs Wang Yi’s (王毅) comments about Taiwan, criticizing China as a “troublemaker” in the international community and a disruptor of cross-strait peace. Speaking at a news conference on the sidelines of the Chinese National People’s Congress, Wang said that Taiwan has always been a territory of China and that it would be impossible for it to become its own country. The “return” of Taiwan to China was the natural outcome of the Chinese people’s resistance against Japan in World War II, and that any pursuit of independence was “doomed
RSS