The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday cut its forecast for GDP growth this year from 2.04 percent to 1.61 percent, as exports and private investment proved bigger drags amid a global economic slowdown.
The revision is necessary after the nation’s economy declined 3.31 percent in the first quarter and grew 1.36 percent in the second quarter, both worse than earlier data indicated.
“Interest rate hikes in advanced nations tethered global business activity and dampened end-market demand for technology products,” DGBAS Minister Chu Tzer-ming (朱澤民) told a news conference in Taipei.
Photo: CNA
China’s disappointing recovery also weighed, the official said.
Taiwan is home to the world’s largest contract manufacturers of electronics used in smartphones, notebook computers, wearables, TVs and automobiles, with China, the US and Europe accounting for 70 percent of outbound shipments.
People are assigning more importance to in-person experiences and are showing less interest in electronic gadgets, Chu said.
That backdrop explains why exports fell 16.97 percent last quarter, following a 19.19 percent tumble three months earlier, the statistics agency said.
The DGBAS is now forecasting a 9.51 percent drop in exports this year, deeper than the 7.27 percent retreat it predicted in May.
Imports, a major gauge of capital equipment and materials intended for exports, shrank 23.98 percent during the second quarter, as local firms cut capital spending and capacity to save costs and cope with poor business visibility, the agency said.
Capital formation slumped 14.37 percent last quarter, removing 3.95 percentage points from second-quarter GDP, it found.
Private investment is expected to fall 5.93 percent, down 3.44 percentage points from the previous forecast, it said.
Private consumption was the main growth driver. It rose 12.56 percent on the back of robust retail, restaurant, automobile and tourism sales, it said.
Taiwanese spending in foreign nations soared 8.9 times, but the money did not affect GDP calculations, it said.
Consumer spending is expected to increase 7.94 percent this year, 1.02 percentage points higher than the previous prediction, it said.
Consumer prices would advance 2.14 percent this year, 0.12 percentage points milder than a May estimate, as international energy and raw material prices continue to rise, it said.
Exports are likely to stay listless this quarter with a 5.45 percent retreat and stage a 4.94 percent increase in the fourth quarter, helped by booming interest in artificial intelligence (AI) applications, Chu said.
Scores of Taiwanese firms are part of global AI supply chains.
Things are set to improve next year with GDP growth of 3.32 percent forecast as the technology downturn comes to an end, Chu said.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
RSS