The service sector has not yet emerged from a slump amid the COVID-19 pandemic, although the rate of decline eased last quarter, the Commerce Research Institute (商業發展研究院) said yesterday.
The coincidental cyclical composite index for the service industry continued to fall last quarter and did not bottom out in October last year as had been expected following the launch of the government’s Quintuple Stimulus Voucher program, the Taipei-based research body said.
The retreat persisted in January, although the leading cyclical composite index has been rising since July 2020, indicating that economic development is uneven, the institute said.
The findings reflect soft domestic demand, which has persisted amid COVID-19 scares, geopolitical conflicts and extreme climate factors that might continue to be a drag on the economy, it said.
The shadow of “stagflation” — a situation of high inflation and unemployment, and slow growth — looms large after Russia invaded Ukraine on Feb. 24, adding to the rise in energy and raw material prices, it said.
While Taiwan had impressive GDP growth last year thanks to strong manufacturing activity and exports, private consumption remained weak, the institute said.
That is because the service industry has been hit hard by pandemic restrictions, it said.
Government bailout and stimulus programs provided short-term relief, but failed to induce industrial transformation or upgrade so service providers could become more resilient and competitive, it said.
Australia, Canada, the EU, Japan and the US have imposed economic sanctions on Russia, putting the world at the most risk of stagflation since the energy crisis of the 1970s, it said.
Taipei should quickly draw up plans to offset lost imports to maintain the supply-demand balance and work closer with the private sector amid a digital transformation, and the move toward environmental, social and corporate governance business models, the institute said.
Overdependence on foreign markets should be reduced to bolster Taiwan’s economic resilience and make it less susceptible to external shocks, it said.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
EARLY TALKS: Measures under consideration include convincing allies to match US curbs, further restricting exports of AI chips or GPUs, and blocking Chinese investments US President Donald Trump’s administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US president plans to expand efforts that began under former US president Joe Biden to limit Beijing’s technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd and ASML Holding NV engineers from maintaining semiconductor gear in China, people familiar with the matter said. The aim, which was also a priority for Biden, is to see key allies match China curbs the US
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
STRUGGLING TO SURVIVE: The group is proposing a consortium of investors, with Tesla as the largest backer, and possibly a minority investment by Hon Hai Precision Nissan Motor Co shares jumped after the Financial Times reported that a high-level Japanese group has drawn up plans to seek investment from Elon Musk’s Tesla Inc to aid the struggling automaker. The group believes the electric vehicle (EV) maker is interested in acquiring Nissan’s plants in the US, the newspaper reported, citing people it did not identify. The proposal envisions a consortium of investors, with Tesla as the largest backer, but also includes the possibility of a minority investment by Hon Hai Precision Industry Co (鴻海精密) to prevent a full takeover by the Apple supplier, the report said. The group is
RSS