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.
FREEDOM OF NAVIGATION: The UK would continue to reinforce ties with Taiwan ‘in a wide range of areas’ as a part of a ‘strong unofficial relationship,’ a paper said The UK plans to conduct more freedom of navigation operations in the Taiwan Strait and the South China Sea, British Secretary of State for Foreign, Commonwealth and Development Affairs David Lammy told the British House of Commons on Tuesday. British Member of Parliament Desmond Swayne said that the Royal Navy’s HMS Spey had passed through the Taiwan Strait “in pursuit of vital international freedom of navigation in the South China Sea.” Swayne asked Lammy whether he agreed that it was “proper and lawful” to do so, and if the UK would continue to carry out similar operations. Lammy replied “yes” to both questions. The
Two US House of Representatives committees yesterday condemned China’s attempt to orchestrate a crash involving Vice President Hsiao Bi-khim’s (蕭美琴) car when she visited the Czech Republic last year as vice president-elect. Czech local media in March last year reported that a Chinese diplomat had run a red light while following Hsiao’s car from the airport, and Czech intelligence last week told local media that Chinese diplomats and agents had also planned to stage a demonstrative car collision. Hsiao on Saturday shared a Reuters news report on the incident through her account on social media platform X and wrote: “I
SHIFT PRIORITIES: The US should first help Taiwan respond to actions China is already taking, instead of focusing too heavily on deterring a large-scale invasion, an expert said US Air Force leaders on Thursday voiced concerns about the Chinese People’s Liberation Army’s (PLA) missile capabilities and its development of a “kill web,” and said that the US Department of Defense’s budget request for next year prioritizes bolstering defenses in the Indo-Pacific region due to the increasing threat posed by China. US experts said that a full-scale Chinese invasion of Taiwan is risky and unlikely, with Beijing more likely to pursue coercive tactics such as political warfare or blockades to achieve its goals. Senior air force and US Space Force leaders, including US Secretary of the Air Force Troy Meink and
‘BUILDING PARTNERSHIPS’: The US military’s aim is to continue to make any potential Chinese invasion more difficult than it already is, US General Ronald Clark said The likelihood of China invading Taiwan without contest is “very, very small” because the Taiwan Strait is under constant surveillance by multiple countries, a US general has said. General Ronald Clark, commanding officer of US Army Pacific (USARPAC), the US Army’s largest service component command, made the remarks during a dialogue hosted on Friday by Washington-based think tank the Center for Strategic and International Studies. Asked by the event host what the Chinese military has learned from its US counterpart over the years, Clark said that the first lesson is that the skill and will of US service members are “unmatched.” The second
RSS