TAIPEI (TVBS News) — Following the pandemic slowdown, Taiwan's food and hotel industries are experiencing a resurgence in business.
Unfortunately, the manufacturing and semiconductor industries aren't experiencing positive growth.
The ongoing increase in U.S. interest rates and a decrease in consumer market demand have significantly impacted Taiwan's exports.
According to Lee Cheng-hsi, a marketing and PR consultant, "the sales of street food and wedding banquet meals have witnessed significant improvements, with current growth rates likely hovering around 60% and potentially recovering up to 80%."
While some industries are experiencing a significant increase in business, not all industries are faring well in terms of business.
"Taiwan boasts a plethora of export products, primarily non-essential consumer goods, such as mobile phones, laptops, and bicycles," said Wu Dachrahn, a professor at the Department of Economics, National Central University
"In times of economic hardship, families may have to remove such commodities and non-essential products from their budget," Wu added.
Since Taiwan's exports constitute a significant percentage of its GDP, as much as 70%, any adverse impact on export sales could have far-reaching implications.
Taiwan's manufacturing exports heavily depend on the export of chips and components.
According to data, as of August 2022, Taiwan's exports exceeded US＄40 billion but declined to below US＄40 billion in September and continued to decrease, reaching US＄35.7 billion in December.
"In January of this year, there was a considerable drop to around US＄31 billion," Wu continued. "Although raising interest rates by the central bank or the Federal Reserve may initially cause a sharp decline, the effects tend to be cumulative and grow larger over time."
Taiwan's manufacturing industry is unlikely to return to previous production levels earlier this year. The nation is closely monitoring the U.S. interest rate hike and anticipates a slowdown that will transform the production index from a negative state to a positive one.
