Cathay Financial Holding Co (國泰金控) yesterday raised its forecast for the nation’s economic growth this year to 4.2 percent, up from the 3.2 percent it predicted in December last year, due to stronger-than-expected private investment and the improving global situation, it said.
The firm raised its prediction for private investment growth to 3.7 percent, as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, in January raised its capital expenditure to between US$25 billion and US$28 billion, it said.
Cathay Financial previously expected private investment to slow this year and grow 2.5 percent in light of a high comparison base last year.
Photo: Allen Wu, Taipei Times
TSMC’s investment could be a gauge for investment in the local technology industry, and its larger-than-expected investment indicated that overall investment is likely to retain healthy momentum this year, said Hsu Chih-chiang (徐之強), a professor of economics at National Central University who heads a research team commissioned by Cathay Financial.
Taiwanese firms would continue to benefit from strong demand for new technology applications and devices required to maintain a low-contact economy, Hsu said.
Meanwhile, with more countries beginning to distribute COVID-19 vaccinations, the global economy is expected to rebound, which would boost foreign consumption and Taiwan’s export orders, Hsu said.
“We predict that the nation’s exports are likely to remain strong in the first half of this year, but the pace of increase might slow in the second half due to a high comparison base last year,” he said.
Cathay Financial forecast that the central bank would keep benchmark interest rates unchanged this year, as the nation’s inflation is expected to remain mild, Hsu said.
“The local economy’s growing momentum and inflation pressure would increase the chance of the central bank raising rates, but on the other hand, volatility in the global financial system is expected to rise, which would trim the possibility of rate increases,” Hsu 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