Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth from 3.1 percent to 3.38 percent, as exports could receive a bigger boost from global artificial intelligence (AI) demand.
“The nation’s exports would start to set sail from this quarter, thanks to better order visibility,” CIER president Yeh Chun-hsien (葉俊顯) said.
Exports, the main growth driver that accounts for 60 percent of GDP, would shift from a 9.8 percent decline last year to a 7.89 percent increase this year, as inventory adjustments come to a close, the think tank said.
Photo: Hsu Tzu-ling, Taipei Times
The low base last year would also help and explain why the recovery momentum would ease off quarter by quarter, Yeh said.
GDP growth is predicted to reach 5.57 percent last quarter, and to slow to 3.55 percent this quarter, 3 percent next quarter and 1.66 percent in the final quarter, he added.
Global AI demand has been stronger than expected and would ramp up businesses of local tech firms on its supply chain, Yeh said.
Revenue from AI server chips would more than double this year and would account for 20 percent of overall sales by 2028 from a contribution that is currently in the low teens, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told investors on Thursday.
Yeh said the upward revision also aims to reflect an increase in government expenditure that would expand 2.68 percent this year to build up national defense and armament procurements.
Private consumption would register a healthy 2.09 percent gain, falling from an 8.32 percent uptick, as demand for outbound travel holds sturdy, especially after an earthquake which measured a 7.2 on the Richter scale jolted Hualien on April 3 and is expected to hinder tourism in eastern Taiwan, Yeh added.
CIER has a dim view on private investment, saying that the GDP component would shrink 0.2 percent this year after a deep 11.6 percent retreat last year.
Local firms remain cautious about capital spending, as the US Federal Reserve appears unlikely to cut interest rates anytime soon and Taiwan’s central bank last month unexpectedly raised borrowing costs by 0.125 percentage points, Yeh said.
Sticky inflation and spiking geopolitical tensions lent support to a conservative approach, he added.
CIER is looking at an inflation of 2.3 percent, which is above the central bank’s 2 percent alarm, mitigating little from a 2.49 percent rise last year.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS