Central bank Governor Yang Chin-long (楊金龍) yesterday said that it is too early to bet on GDP growth in Taiwan this year, as the bottom is yet to come amid the COVID-19 pandemic.
Yang sounded more cautious than other financial and economic officials, who earlier voiced confidence about growth of more than 1 percent.
“I cannot say for sure that the nation will log a GDP growth of at least 1 percent this year, as I don’t see the bottom yet,” Yang said, when asked at a meeting of the legislature’s Finance Committee to weigh the economic fallout of the nation’s outbreak.
Photo: CNA
Taiwan, as a small and open nation, is taking a blow from crimped economic activity around the world, Yang said, adding that nonessential businesses in many countries remain closed to help stop the spread of the virus.
Yang’s caution contradicted assurances given earlier by ministers of the Ministry of Finance; the Ministry of Economic Affairs; the Directorate-General of Budget, Accounting and Statistics; and the National Development Council.
Taiwan’s export-reliant economy expanded 1.45 percent last quarter from a year earlier, but contracted 5.91 percent at a seasonally adjusted, annualized rate, which might remain negative this quarter and usher in a technical recession.
The economy is still losing steam, although Taiwan has put up a good fight against the virus, Yang said.
A total of 22 research institutes at home and abroad have made projections for Taiwan, with nine betting on a mild recession, the governor said.
The central bank would update its forecast next month, when board members meet to discuss the policy rate, Yang said.
Taiwan is expected to have a swoosh-shaped rebound, featuring a steeper slope on the downside and a partial bounce followed by a more gradual recovery, Yang added.
Economists have said that reopening economies is not likely to bring a quick return to normalcy because social distancing practices, lingering concern over health and a desire to replenish emergency savings would offset some pent-up demand.
Many have also said that the worst might be over this quarter, but Yang said that too much uncertainty remains to reach conclusions.
The governor said that he shares that US Federal Reserve’s misgivings about a policy of negative interest rates to stimulate an economy, adding that there is room for rate cuts in Taiwan, if necessary.
The government can take more aggressive steps, such as a distribution of consumption vouchers to bolster private consumption, which declined 0.53 percent in the first quarter, he said.
IDENTITY: Compared with other platforms, TikTok’s algorithm pushes a ‘disproportionately high ratio’ of pro-China content, a study has found Young Taiwanese are increasingly consuming Chinese content on TikTok, which is changing their views on identity and making them less resistant toward China, researchers and politicians were cited as saying by foreign media. Asked to suggest the best survival strategy for a small country facing a powerful neighbor, students at National Chia-Yi Girls’ Senior High School said “Taiwan must do everything to avoid provoking China into attacking it,” the Financial Times wrote on Friday. Young Taiwanese between the ages of 20 and 24 in the past were the group who most strongly espoused a Taiwanese identity, but that is no longer
A magnitude 6.4 earthquake and several aftershocks battered southern Taiwan early this morning, causing houses and roads to collapse and leaving dozens injured and 50 people isolated in their village. A total of 26 people were reported injured and sent to hospitals due to the earthquake as of late this morning, according to the latest Ministry of Health and Welfare figures. In Sising Village (西興) of Chiayi County's Dapu Township (大埔), the location of the quake's epicenter, severe damage was seen and roads entering the village were blocked, isolating about 50 villagers. Another eight people who were originally trapped inside buildings in Tainan
‘ARMED GROUP’: Two defendants used Chinese funds to form the ‘Republic of China Taiwan Military Government,’ posing a threat to national security, prosecutors said A retired lieutenant general has been charged after using funds from China to recruit military personnel for an “armed” group that would assist invading Chinese forces, prosecutors said yesterday. The retired officer, Kao An-kuo (高安國), was among six people indicted for contravening the National Security Act (國家安全法), the High Prosecutors’ Office said in a statement. The group visited China multiple times, separately and together, from 2018 to last year, where they met Chinese military intelligence personnel for instructions and funding “to initiate and develop organizations for China,” prosecutors said. Their actions posed a “serious threat” to “national security and social stability,” the statement
NATURAL INTERRUPTION: As cables deteriorate, core wires snap in progression along the cable, which does not happen if they are hit by an anchor, an official said Chunghwa Telecom Co (中華電信) immediately switched to a microwave backup system to maintain communications between Taiwan proper and Lienchiang County (Matsu) after two undersea cables malfunctioned due to natural deterioration, the Ministry of Digital Affairs told an emergency news conference yesterday morning. Two submarine cables connecting Taiwan proper and the outlying county — the No. 2 and No. 3 Taiwan-Matsu cables — were disconnected early yesterday morning and on Wednesday last week respectively, the nation’s largest telecom said. “After receiving the report that the No. 2 cable had failed, the ministry asked Chunghwa Telecom to immediately activate a microwave backup system, with
RSS