The nation’s 4 percent GDP target this year might be difficult to attain, as Russia’s invasion of Ukraine and global monetary tightening is expected to weigh on exports in the second half, central bank Governor Yang Chin-long (楊金龍) said yesterday.
At a meeting of the legislature’s Finance Committee, Yang said that the central bank would revise its growth forecast at its board meeting next month.
The nation’s top monetary policymaker in March said the growth rate was expected to be 4.05 percent.
Photo: Wang Yi-sung, Taipei Times
“GDP growth of 4 percent this year looks increasingly untenable, as unfavorable factors would start to weigh in the second half, even though exports and consumption data have fared quite well thus far,” Yang said.
The war in Ukraine has been termed a “black swan” event — something that was unpredictable and had profound consequences on the global economy — while the rate hikes by the US Federal Reserve have been called a “gray rhino” event — a threat to markets that was predictable, yet largely ignored.
The military conflict in eastern Europe prompted major countries to impose sanctions on Russian oil and gas exports, which drove up international prices for fuel and raw materials.
Global central banks are hiking interest rates to help curb inflation, which is likely to slow economies down.
“The downside risks raise concern over whether growth momentum for Taiwan’s exports can extend into the second half,” Yang said.
Major chipmakers have given rosy earnings guidances for this quarter, while suppliers of laptops and other electronic devices expect declines due to COVID-19 lockdowns in China.
International research bodies have trimmed their forecasts for Taiwan’s GDP growth this year to 3.6 to 3.8 percent, Yang said.
Consumer prices in Taiwan remain high this month after being above 3 percent for the past two months, Yang said.
However, he refused to say unequivocally that the central bank would increase interest rates at next month’s meeting.
“The central bank has made known its stance leaning toward tightening and there are several policy options to achieve that end,” Yang said, citing interest rate hikes, selective credit controls and draining liquidity from the foreign exchange market, among other measures.
The central bank is mulling further selective credit controls, especially in areas with evident housing price hikes, to induce a soft landing, he said.
Policy tools under consideration include shortening mortgage periods and lowering loan-to-value ratios for second-home financing, he said, adding that the current policy only bans grace periods on second-home mortgages.
Shorter mortgage periods, from 20 to 30 years, would prompt borrowers to be more cautious in their financial planning, Yang said.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
THUGGISH BEHAVIOR: Encouraging people to report independence supporters is another intimidation tactic that threatens cross-strait peace, the state department said China setting up an online system for reporting “Taiwanese independence” advocates is an “irresponsible and reprehensible” act, a US government spokesperson said on Friday. “China’s call for private individuals to report on alleged ‘persecution or suppression’ by supposed ‘Taiwan independence henchmen and accomplices’ is irresponsible and reprehensible,” an unnamed US Department of State spokesperson told the Central News Agency in an e-mail. The move is part of Beijing’s “intimidation campaign” against Taiwan and its supporters, and is “threatening free speech around the world, destabilizing the Indo-Pacific region, and deliberately eroding the cross-strait status quo,” the spokesperson said. The Chinese Communist Party’s “threats
RSS