The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday upgraded its GDP growth forecast for Taiwan this year to 4.03 percent, from the 3.85 percent that it estimated in July, and predicted the economy would grow 3.15 percent next year.
However, the institute warned that US president-elect Donald Trump’s return to the White House creates uncertainty about Taiwan’s foreign trade outlook.
Speaking at a seminar in Taipei, TIER president Chang Chien-yi (張建一) said the key word next year is “trade.”
Photo: Hsu Tzu-ling, Taipei Times
Chang said he felt “cautiously optimistic” about Taiwan’s economy next year.
If Trump were to raise tariffs as he pledged during the campaign, global trade volume would definitely decrease and the world would see a return of higher inflation, he said.
“If the US raises tariffs, would the countries being taxed retaliate, or would other countries impose taxes on each other? It will be several months before the impact on global prices is known,” Chang said.
The institute forecast that Taiwan’s consumer price index would rise 2.23 percent this year and 1.87 percent next year.
Domestic demand in Taiwan has remained stable this year, and exports of information and communications technology (ICT) products, semiconductors and artificial intelligence applications have continued to gain momentum, it said.
However, exports of the old economy sector slumped in the first half of the year, affected by China’s overproduction and the depreciation of the yen, it said.
The good news is that domestic investment has increased significantly since the third quarter, meaning that manufacturers in traditional industries have seen signs of opportunities and started related planning, it added.
As a result, next year’s economic growth is expected to be more comprehensive and evenly distributed between tech and non-tech sectors, the institute said.
The world’s two biggest economies — the US and China — are expected to face headwinds next year in terms of consumption and investment, it said.
However, Europe, Japan and emerging markets, including Southeast Asia, South Asia, Africa and Latin America, would see sustained recovery next year, which would benefit Taiwan’s exports, the institute said.
Facing the return of Trump to the White House, Taiwan must communicate well with the US government, especially on trade issues, as Taiwan’s trade surplus with the US might exceed that with China this year, Chang said.
The government must pay close attention to changes in US policies and propose contingency plans as early as possible, he added.
Taiwan plays an important role in the global ICT industry, but at the same time, Taiwan is also a small nation, Chang said.
If it wants to export to other markets, it must abide by the global order, especially when that order is dominated by a big nation, so thinking about how to communicate with Trump is important, he said.
The institute said Trump’s policies are expected to have an important impact on global political and economic development, which might also affect Taiwan’s overall trade performance.
Those policies could include lowering corporate taxes, raising tariffs, abolishing anti-inflation bills and green energy subsidies, restarting the petrochemical industry, increasing support for Israel, asking allies to increase military spending, and even considering withdrawing from NATO, 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
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
WARNING SHOT: The US president has threatened to impose 25 percent tariffs on all imported vehicles, and similar or higher duties on pharmaceuticals and semiconductors US President Donald Trump on Wednesday suggested that a trade deal with China was “possible” — a key target in the US leader’s tariffs policy. The US in 2020 had already agreed to “a great trade deal with China” and a new deal was “possible,” Trump said. Trump said he expected Chinese President Xi Jinping (習近平) to visit the US, without giving a timeline for his trip. Trump also said that he was talking to China about TikTok, as the US seeks to broker a sale of the popular app owned by Chinese firm ByteDance Ltd (字節跳動). Trump last week said that he had
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