Taiwan’s economy might expand 3.22 percent this year, moderating from a 4.3 percent pickup last year, as exports and domestic demand remain healthy despite rising uncertainty linked to global trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
“Taiwanese firms would continue to benefit from the active building of artificial intelligence capability by global technology titans, but [US president-elect] Donald Trump is casting a shadow over the economic landscape with his planned tariff hikes on all imports,” CIER president Lien Hsien-ming (連賢明) said at an economic outlook forum in Taipei.
It is unclear whether Taiwan’s information and communications technology products would be exempted from extra tariffs, as they are currently tariff-free, Lien said.
Photo: RITCHIE B. TONGO, EPA-EFE
Exports, the main growth driver, might rise 5.56 percent this year, while imports would rise 5.36 percent, slowing from 9.08 percent and 11.67 percent respectively last year, the Taipei-based think tank said.
Tech product shipments bound for China and other destinations deemed as unfriendly by the US might take a hit from Washington’s latest export bans, Lien said, adding that more time is needed to evaluate the impact as the US is going through a power transition.
Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said Trump is waging a “technology war” under the guise of a tariff war to create a gap between US and Chinese technology.
Directorate-General of Budget, Accounting and Statistics deputy head Tsai Hung-kun (蔡鴻坤) said that tariff hikes appear inevitable, but local firms’ reshoring in recent years has helped mitigate the shock and bolster private investment.
Private investment is projected to gain 4.71 percent this year on top of a 4.74 percent increase last year, the CIER said.
The consumer price index might slow to 1.93 percent this year, returning to the central bank’s 2 percent target after rising 2.18 percent last year, the institute said.
The central bank is likely to keep interest rates unchanged given Taiwan’s decelerating, but decent GDP growth, Taishin Securities Investment Trust Co (台新證券投信) chairman Cheng Cheng-mount (鄭貞茂) said.
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