Taiwan Poised For Economic Bounceback In 2024
Date
12/18/2023 5:42:06 AM
(MENAFN- Asia Times) The Taiwanese Economy will end the year with underwhelming economic growth of around 1.2%. One of the key problems has been weak exports due to the high cost of funding globally and excess inventory in the Semiconductor and electronic sectors.
The good news is that the worst should be over in 2024 as the US federal Reserve starts easing in the second quarter of 2024. Beyond the cheaper cost of funding globally, demand for Electronics and semiconductors should also improve as inventories have been reduced in 2023. All in all, Taiwan's growth should more than double in 2024 to 2.9%.
Given better global financial conditions and the expectation of a better export cycle, Taiwanese companies should increase their capex in 2024. As regards foreign direct investment, China remains attractive both for green energy, especially offshore wind, but also for artificial intelligence-related projects.
However, geopolitics are becoming increasingly relevant for foreign investors when deciding whether to bet on Taiwan. In particular, the risk of military conflict in the Taiwan Strait is often discussed in the board rooms of major foreign companies considering Taiwan as an investment destination.
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