Cathay Pacific National Taiwan University’s industry-university team yesterday revised down the economic growth rate for this year to 1.8%, while raising the annual growth rate of the consumer price index (CPI) to 2%.

(Central News Agency)

The CPI annual growth rate was raised to 2%, and the inflation rate was higher than the economic growth rate for two consecutive years after 2008

[Reporter Wu Xintian/Taipei Report] Cathay Pacific National Taiwan University's industry-university team lowered the economic growth rate for this year to 1.

Eight percent, while raising the annual growth rate of the consumer price index (CPI) to two percent.

Scholars warn that this may be the second consecutive year in which the inflation rate was higher than the economic growth rate after the 2008 financial tsunami, which also means that the economy has stagnated and inflation has stagnated.

Cathay Pacific held a press conference on Taiwan’s economic climate and financial situation in the first quarter of 2023 yesterday. Xu Zhiqiang, co-host of Cathay-Taiwan University Industry-University Cooperation Project, pointed out that exports in the first half of this year were still weak, and manufacturers continued to destock, suppressing investment It shows that it is only supported by domestic consumption, so the estimated growth rate of Taiwan's economy this year will be changed from two.

Three percent is revised down to one.

8%, there is an 80% chance of falling on one.

One percent to two.

six%.

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The central bank may raise interest rates again this year

In addition, the growth rate of eating out and rent is still high, and electricity prices will increase by an average of 11% starting in April, which is expected to push up inflation. Therefore, the industry-university team of Cathay Pacific University estimates the annual growth rate of CPI this year from 1.

Seven percent was raised to two percent.

With core inflation remaining high, Xu Zhiqiang predicted that the central bank may raise interest rates again in the second and third quarters of this year.

Xu Zhiqiang pointed out that so far, Taiwan's inflation rate was higher than the economic growth rate for two consecutive years only in 2008 and 2009 during the global financial tsunami.

Last year, my country's CPI annual growth rate II.

Ninety-five percent, economic growth rate II.

Four to five percent; if the Cathay Pacific National Taiwan University industry-university team's forecast for this year comes true, there will be another two consecutive years in which the inflation rate is higher than the economic growth rate.

He bluntly stated that the current economic situation of our country this year is "stagnant inflation".

Domestic demand is the main force supporting economic growth

He said that the major central banks have accelerated interest rate hikes, and the inhibitory effect on demand in Europe and the United States has continued to appear. In addition, manufacturers have destocked, which is not good for exports and investment prospects.

However, optimistic factors include China's unblocking, post-epidemic demand and artificial intelligence applications providing downside support for the economy.

He said that the opening of national borders and the loosening of epidemic prevention measures have boosted private consumption. Domestic demand will be a stable force supporting economic growth this year.

Xu Zhiqiang said that the current economic situation is worse since the financial tsunami, but not as bad as the financial tsunami.

At that time, many financial institutions went bankrupt, which forced the governments of various countries to strengthen the supervision of financial institutions. Although there were reports of financial crises in European and American banks this year, they were all small and medium-sized banks.

He said that facing the economic situation of stagnant inflation, the central bank and the government must carefully match fiscal and monetary policies.

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