Forward-looking‧Professional‧International 
May 2024  
The Fed maintains cautious stance on rate cuts, Europe sees moderate recovery, China's overcapacity raises global concerns and fuels trade tensions
TIER findings: TW industrial sentiments remain optimistic about future outlook amid slightly uneven market conditions
In the backdrop of geopolitical conflicts and major central banks maintaining high interest rate environments, the global economy has demonstrated resilience. The U.S. economy remains robust, Europe's economic performance is expected to gradually strengthen, with other regions also exhibiting resilience. However, recent escalations in geopolitical risks, coupled with ongoing trade frictions between the U.S., Europe, and China over specific industries, have added to global inflationary and trade development uncertainties. In Taiwan’s domestic manufacturing sector, amid the industry's low season, manufacturing orders, production, and exports in April declined compared to the previous month, leading to a shift in manufacturers' views towards neutral regarding the future six-month economic outlook. However, with gradual improvements in supply and demand, coupled with accelerated adoption of emerging technologies, global demand for consumer goods is gradually picking up. In Taiwan’s service sector, tensions in the Middle East and elevated inflation in the US, delaying rate cuts, have led to heightened volatility in financial markets in April. ...Read more
Will AI lead to an electricity shortage crisis?
Emerging technology sparked both optimism and concern. Among these, the rapid advancement of AI raises expectations for problem-solving, but concerns linger over its potential strain on the electricity supply due to increased demand. The sense of crisis serves as a reminder for everyone to take appropriate precautions, but it should not be exaggerated arbitrarily, leading to undue panic and the implementation of incorrect measures. Technological progress, encompassing hardware and software, continues to drive efficiency gains and reduce energy consumption. Concerns regarding AI-induced power shortages largely arise from assessments focused solely on immediate electricity demands, neglecting the potential for future technological advancements. AI operations are expected to mimic human cognition, accumulate experience and knowledge, and minimize unnecessary computations through the integration of appropriate theoretical assumptions. This shift could contribute to energy conservation efforts. As a leader in semiconductors and ICT, Taiwan's urgent need for electricity due to AI development arises from the electricity required for design and component operation during production. This demand, potentially requiring green energy for international buyers, highlights the need to prioritize the development of green energy supply and flexible electricity supply policies.(For more, please see current monthly journal)

Industrial production index grows by 14.61 percent on manufacturing output
China launches anti-dumping probe into EU, US, Japan, Taiwan plastics
Taiwan Economic Research Monthly
Transforming, Evolving, Resurging: The Business Services Sector's Resplendent Revival Post-Pandemic
This month's featured articles observe the current state and trends within the business services industry, exploring how shifting consumer habits in the post-pandemic era, coupled with the limited scale of domestic market demand, can unleash resilient growth potential. Beyond expanding domestic markets, efforts are underway to promote the internationalization of services by boosting service trade, thereby accelerating the sector's transformation into an export-oriented service trade powerhouse. Furthermore, facing an environment of labor shortages and low wages, the articles elucidate the underlying causes of the manpower supply-demand gap within the business services industry and scrutinize the evolving work values of the new generation workforce, who place greater emphasis on achieving a harmonious work-life balance – presenting novel challenges for the development of the sector's labor market. Furthermore, as digital technology advances at a rapid pace, the articles also explore how the business services industry can leverage innovative technological applications to elevate consumer experiences to unprecedented heights.
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