The nation’s power consumption last month shrank 4.19 percent from a year earlier, falling for nine straight months, as heavy industrial and service users took a hit from an ongoing global economic slowdown, the Taiwan Research Institute (TRI, 台灣綜合研究院) said yesterday.
The retreat in the Electricity Prosperity Index (EPI), which the New Taipei City-based institute uses to gauge the health of the industrial and service sectors, widened from May, in line with the downtrend for exports, as inventory destocking appears sharper and longer than expected.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest chipmaker, on Thursday projected a deeper revenue decline of 10 percent for this year, from 1 to 6 percent it suggested three months earlier.
Photo: CNA
Semiconductors used in smartphones, high-performance computing, laptops, cars and other applications drive 20 percent of Taiwan’s exports.
High-voltage power consumption fell 3.92 percent year-on-year last month, with a retreat of 5.28 percent for manufacturers and a 2.24 percent decrease among service providers, the institute said.
The latest data kept the EPI in “blue” territory for the past nine months, indicating a recessionary state, it said.
TRI president Wu Tsai-yi (吳再益) said Taiwan’s economy is in the process of bottom-building, but a turnaround has remained evasive.
The institute expects a 0.7 percent decline in GDP for last quarter, easing from a 2.87 percent contraction three months earlier.
“The room of upside surprises is very limited for Taiwan as long as the world’s economy faces headwinds,” Wu said.
The US and eurozone are facing sticky inflation, while China is seeking to recover from pains induced by its COVID-19 lockdowns, the institute said.
It is safe to say that Taiwan’s GDP would improve quarter-by-quarter this year, Wu said.
National Development Council Minister Kung Ming-hsin (龔明鑫) on Thursday said the GDP uptick would be evident in the fourth quarter, consistent with expectations that exports would return to positive growth in November.
Upcoming holidays in the West and the low base last year would lend seasonal support, analysts said.
In related development, people have regained some risk appetite, encouraged by recent rallies on the local bourse, a consumer sentiment survey by Cathay Financial Holding Co (國泰金控) showed on Thursday.
More than 40 percent of the respondents expect the TAIEX to rise in the coming six months, compared with 24.4 percent who held the opposite view, the monthly survey of 14,663 clients found.
While 53.1 percent of respondents intend to keep their share holdings level, 30 percent plan to increase their stock investments and 16.5 percent intend to cut positions, it said.
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