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.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS