The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday trimmed its forecast for the nation’s GDP growth this year from 2.72 percent to 2.37 percent, as the COVID-19 outbreak in China has dealt a blow to Taiwan’s exports and private consumption.
The downward revision mainly reflects supply-chain disruptions and weaker consumer activity, which would slow the economy this quarter to a 1.8 percent increase, the weakest gain since the second quarter of 2016, the statistics agency said.
“Exports would bear the brunt as China accounts for 40 percent of Taiwanese exports,” DGBAS Minister Chu Tzer-ming (朱澤民) told a news conference in Taipei.
The outbreak is also interrupting operations of local firms based in China, but it could also hurt the larger market’s demand for electronics, Chu said, adding that poor visibility is limiting the accuracy of the agency’s projections.
International research bodies have not yet adjusted their growth forecasts to account for the outbreak, the DGBAS said.
The outbreak might dent the nation’s economy by between 0.35 percentage points and 0.5 percentage points this year, if it can be contained in three months, Chu said.
That would be less serious than the 2003 SARS outbreak that erased 0.57 percentage points from Taiwan’s GDP growth that year, he said.
Exports of goods and services are now expected to grow only 1.73 percent this year, down 0.96 percentage points from the previous estimate, after factoring in a sharp decline in tourist arrivals, Chu said.
To cope with the fallout of the outbreak, five-star hotels have been offering discounts and takeouts.
Upscale mall operator Breeze Group (微風集團) is reportedly reducing its staff by 30 percent, as visitors to Taipei’s Xinyi District (信義) have dropped by 70 percent, local Chinese-language media reported yesterday.
Private consumption, which accounts for more than 50 percent of GDP, is expected to squeeze a 0.75 percent increase this quarter and expand 1.58 percent this year, the DGBAS said.
The prediction suggests a downgrade of more than 50 percent from the agency’s earlier estimate.
The DGBAS reduced its forecast for this year’s private investment growth by 0.95 percentage points to 3.1 percent, after last year’s figure proved much stronger, with an increase of 9.61 percent from 7.61 percent.
DGBAS also revised down GDP growth for last year to 2.71 percent, 0.02 percentage points lower than data released last month.
The adjustment came after the economy grew 3.31 percent in the final quarter of last year, 0.07 percentage points softer than previously reported.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS