June 2022  
The international economy faces a possible risk of stagnant inflation
Relaxation in COVID restriction policies boosted TIER’s service composite sector
Observing the recent international economic situation, the Russian-Ukraine war has not ended, which has made the global inflationary pressure and ramifications unabated. In addition, the collapse of financial assets has reduced the willingness of people to consume and enterprises to invest. The OECD has all cut its forecasts for global economic growth this year, and the World Bank has warned of a growing risk of stagnant inflation across the world. In the domestic manufacturing industry, although the demand for foundry and packaging and testing is still booming, the demand for consumer electronic products continues to decline, causing the related supply chain to start the adjustment of inventory and orders. Manufacturers' views are polarized. Although the service industry is facing the spread of the pandemic, which reduces the willingness of people to dine out, and the property and casualty insurance industry is affected by the COVID prevention insurance indemnity and the increase in indemnity preparations, the catering industry and the insurance industry are nevertheless optimistic about the economic performance of the month. Given the “coexistence of COVID” has become a under normal circumstances, the Taiwanese government continues to loosen border controls, which is expected to drive business and tourism activities to become more popular, and people's interest in traveling will gradually recover. The service and construction composite indicators issued by Taiwan Institute of Economic Research (TIER) both went up, despite the manufacturing composite indicator declined in May 2022. ...Read more
Taiwan set to hike electricity prices, industry blamed for record use
The Ministry of Economic Affairs (MOEA) has hinted at a rise in Taiwan’s electricity prices as environmental activists call on industry to shoulder the burden of increased costs. Economics Minister Wang Mei-hua said a committee will convene on June 27th 2022 to discuss the issue and “reasonably reflect” the surging cost of energy globally. The move follows record-breaking use of electricity in Taiwan and concerns aired by the American Chamber of Commerce in Taiwan about the country’s water and energy supplies. Taiwan saw the consumption of 283 billion kWh of energy in 2021, up 4.3% yearly and the highest in a decade. Industrial use accounted for 57% and users are charged at one of the lowest rates in the world. The rate for industrial use in Taiwan was the sixth lowest in the world in 2020, after Sweden, the U.S., Denmark, Finland, and Hungary, according to the Environmental Information Center. Taiwan added another 16.4 billion kWh in three years from 2018, the last time electricity prices were adjusted. Of this, 76% of use was attributed to industry, meaning the sector has long enjoyed the dividends of low energy rates but failed to address the environmental cost, the environmentalists argued. Meanwhile, the environmental community said supporting measures should be put in place to help disadvantaged households that are left vulnerable by rising energy bills (Source: Taiwan News).

Business outlook among Taiwan manufacturers weakens to 23-month low (Source: Focus Taiwan).
NDC minister seeking joint projects during trip to US (Source: Taipei Times).
Taiwan Economic Research Monthly
Expanding the scope of application of advanced energy management, and improving the efficiency of industrial energy use
Net-zero carbon emissions are already a development consensus of all countries in the world. The National Development Council also released Taiwan's 2050 net-zero emissions path and strategy in March this year. Among them, improving energy efficiency is the main measure for the residential and industrial sectors. According to past experience, improving energy efficiency, reducing energy use and reducing carbon emissions have always been the most feasible and critical necessary measures. In the past, industrial electricity consumption was mainly concentrated in the manufacturing industry, so it is also a very reasonable policy measure to take the manufacturing industry as the management object in the early stage of system promotion. However, with the development and change of the industrial environment, the scale of electricity demand in commercial and service industries is increasing, and the electricity consumption structure is completely different from the previous experience. The time is very ripe to include investment projects in the commercial and service industries such as data centers as the applicable objects of energy early management.
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