Taiwan’s economy would grow 3.6 percent this year and 2.5 to 3 percent next year, Standard Chartered Bank Taiwan (渣打台灣) forecast yesterday, saying there are no signs of recession.
The slower GDP growth next year would be due to weakening demand in the US and Europe, even though exports to China would improve from this year, Standard Chartered chief economist Tony Phoo (符銘財) told a news conference.
The US economy is predicted to grow 0.3 percent next year, compared with 2.1 percent this year, and the European economy is forecast to grow 0.4 percent next year, compared with 2.3 percent this year, Phoo said.
Photo: CNA
Taiwan should continue to relax border controls to attract foreign tourists and boost domestic consumption, Phoo said, citing Thailand’s strong GDP growth on recovering tourism.
Despite the emergence of new variants of SARS-CoV-2, Taiwan has reached a high COVID-19 vaccination rate and can continue to ease its social distancing measures to boost private consumption, he added.
“Strong private consumption should help cushion the damage posed by weaker exports next year. Therefore, we see no signs of recession ahead,” Phoo said.
The central bank is expected to stop raising its policy rates next year after inflation abates, he said.
The bank said slowing exports to China could be a drag on the local economy in the second half of the year, as Chinese consumer demand remains weak amid Beijing’s “zero COVID-19” policy and lockdown measures.
“There is a slim chance that China would abandon its zero COVID-19 policy by the end of this year, as many rural areas support this policy,” Becky Liu (劉潔), a Hong-Kong based strategist at Standard Chartered, told the event via videoconference.
Since February, almost all first-tier cities have seen the virus spread continuously, and almost every day there is a small community facing new lockdown measures, Liu added.
The lockdown measures caused China’s import growth to slow in the first half of this year from a year earlier, she said, adding that the situation is unlikely to improve greatly in the second half.
AI BOOST: Although Taiwan’s reliance on Chinese rare earth elements is limited, it could face indirect impacts from supply issues and price volatility, an economist said DBS Bank Ltd (星展銀行) has sharply raised its forecast for Taiwan’s economic growth this year to 5.6 percent, citing stronger-than-expected exports and investment linked to artificial intelligence (AI), as it said that the current momentum could peak soon. The acceleration of the global AI race has fueled a surge in Taiwan’s AI-related capital spending and exports of information and communications technology (ICT) products, which have been key drivers of growth this year. “We have revised our GDP forecast for Taiwan upward to 5.6 percent from 4 percent, an upgrade that mainly reflects stronger-than-expected AI-related exports and investment in the third
Mercuries Life Insurance Co (三商美邦人壽) shares surged to a seven-month high this week after local media reported that E.Sun Financial Holding Co (玉山金控) had outbid CTBC Financial Holding Co (中信金控) in the financially strained insurer’s ongoing sale process. Shares of the mid-sized life insurer climbed 5.8 percent this week to NT$6.72, extending a nearly 18 percent rally over the past month, as investors bet on the likelihood of an impending takeover. The final round of bidding closed on Thursday, marking a critical step in the 32-year-old insurer’s search for a buyer after years of struggling to meet capital adequacy requirements. Local media reports
TECHNOLOGICAL RIVALRY: The artificial intelligence chip competition among multiple players would likely intensify over the next two years, a Quanta official said Quanta Computer Inc (廣達), which makes servers and laptops on a contract basis, yesterday said its shipments of artificial intelligence (AI) servers powered by Nvidia Corp’s GB300 chips have increased steadily since last month, should surpass those of the GB200 models this quarter. The production of GB300 servers has gone much more smoothly than that of the GB200, with shipments projected to increase sharply next month, Quanta executive vice president Mike Yang (楊麒令) said on the sidelines of a technology forum in Taipei. While orders for GB200 servers gradually decrease, the production transition between the two server models has been
ASE Technology Holding Co (日月光投控), the world’s largest integrated circuit (IC) packaging and testing supplier, yesterday announced a strategic collaboration with Analog Devices Inc (ADI), coupled with the signing of a binding memorandum of understanding. Under the agreement, ASE intends to purchase 100 percent shares of Analog Devices Sdn Bhd and acquire its manufacturing facility in Penang, Malaysia, a press release showed. The ADI Penang facility is located in the prime industrial hub of Bayan Lepas, with an area of over 680,000 square feet, it said. In addition, the two sides intend to enter into a long-term supply agreement for ASE to
RSS