The nation’s economy might expand 3.7 percent next year after achieving a better-than-expected increase of 3.6 percent this year, as the firm recovery of the US might offset weakness in Europe and global financial market uncertainties, Australia and New Zealand Banking Group (ANZ) said in a recent report.
“Taiwan’s export-oriented economy appears to move more in tandem with advanced economies than with the Chinese economy,” Hong Kong-based ANZ senior economist Raymond Yeung (楊宇霆) said in the report.
The firm recovery in the US — the largest market for consumer electronics, devices and components — might offset a slowdown in China as well as the disappointing showing in Europe and Japan, Yeung said.
Yeung said Taiwan’s economy might report a better-than-expected 3.6 percent increase this year, riding on the launch of Apple Inc’s new handsets, as major Taiwanese technology firms were in the supply chain for the popular iPhone 6.
“Taiwan owes its solid recovery this year mainly to resilient external demand and improving domestic activities,” Yeung said.
Looking ahead, the US might continue to lend support next year, while declining crude oil prices would lower inflationary pressures, the report said.
The Australian banking group expected Taiwan’s consumer price index to ease to 1 percent next year, from an estimated 1.5 percent this year, the report said.
The softening inflationary pressures drove ANZ to push back its rate hike projection to September next year from March, the report said.
The low inflation environment merits a wait-and-see approach, while wild volatility in currency and crude oil markets pose downside risks to global growth prospects, the report said.
ANZ also saw the risk of weakening domestic consumption, given limited room for earnings improvement ahead, despite mild inflation.
Household disposable income growth has failed to catch up with GDP growth, hindering the growth of consumption, the report said.
“That explains why Taiwan’s consumer sentiment ranks the lowest among Asian economies,” the report said.
Major manufacturers are moving their production bases offshore, but local service sectors have not caught up with economies like Hong Kong and Singapore, the report said.
Taiwan’s fortune has been based on the recent boom of handheld devices and its ability to secure contracts, notably with Apple, leaving its economy vulnerable to the fate of select global supply chains, Yeung said.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in