Taiwan's sovereignty rating is likely to be upgraded to "stable" from "negative" should there be a smooth election with stable relations with China, ratings firm Standard and Poor's (S&P) said yesterday.
"A smooth completion of the presidential election in March, in which no major cross-strait tension arises, could result in the outlook reverting to stable," S&P analyst Tan Kim-eng (陳錦榮) told a teleconference after being asked whether there was a chance for an upgrade in Taiwan's rating after the March poll.
In an e-mail to the Taipei Times, Tan said the key worry was cross-strait uncertainties during the election period.
"This particular risk we are concerned with will be resolved one way or another after March and a conclusion is likely to be made very soon after that," he wrote.
"The risks of Taiwanese politicians stirring up cross-strait tensions could ease after the March 2008 presidential elections -- even if the leading pan-Green party, the Democratic Progressive Party (DPP), continues to control the executive arm," S&P said in an report titled Politics and Policy Environment: Credit Constraint for Many, Support for A Selected Few in Asia-Pacific.
The report said that as people were disenchanted with politicians' inability to reinvigorate the economy, the election was closely tied to economic growth and the nation's ability to generate employment.
"However, should domestic politics once again threaten to destabilize cross-strait relations, risks to the credit ratings will rise," the report said.
Taiwan's very strong net external asset position and the government's effort to improve its fiscal health and restrain budget spending has supported its creditworthiness and mitigates weaknesses elsewhere in its credit quality, Tan said during yesterday's teleconference.
However, the rating will remain unchanged at "AA-/A-1+", he said.
In a separate report on the dilemmas central banks are facing between easing monetary policy to support economic activity and tightening money supply to combat inflation, Tan favored prudence rather than stimulation now and suffering later.
"Despite the short-term costs, central banks that respond with prudent monetary policy changes will help to bring about the important benefit of anchoring inflation expectations," he wrote.
He said cautious monetary measures would help stimulate financial and economic development, which would benefit sovereign credit rating fundamentals.
"These benefits include more financing options for the government, accelerated development of domestic capital markets and improvements to economic growth potential," Tan said.
"The determination of central banks to fight inflation will preserve or strengthen the credit ratings of their respective governments," he said.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS