TAIPEI (TVBS News) — Cathay Financial Holdings (國泰金控), one of Taiwan's largest financial conglomerates, maintained its 2.8% forecast for Taiwan's 2025 economic growth during its closely watched quarterly economic outlook conference Monday (June 16). The financial giant, however, widened its prediction range to between 1.6% and 3.5%, signaling increased uncertainty amid mounting concerns of potential economic headwinds affecting the export-dependent island economy in the coming quarters.
Economists at the financial powerhouse projected a concerning outlook for Taiwan's third-quarter performance, estimating a greater than 60% probability that economic conditions will deteriorate toward recessionary territory. The analysis points to a complex interplay of global factors affecting Taiwan's trade-oriented economy. Recent tariff exemption periods had triggered a manufacturing rush, with companies strategically building inventory levels and generating an artificial export boom. Simultaneously, the global artificial intelligence revolution has driven unprecedented demand for Taiwan's semiconductor and electronic component sectors, bolstering first-half economic performance.
Analysts warned that the looming expiration of these tariff exemptions could trigger a triple threat of declining exports, reduced capital investments, and weakened consumer spending. Cathay's financial conditions index for the upcoming third quarter is expected to fluctuate within what analysts term a "leaning towards easing" range, indicating continued market volatility despite some stabilizing factors. The company's report specifically highlighted how tariff policies implemented during the previous Trump administration continue to reverberate through global markets, creating persistent uncertainty for Taiwan's export sectors.
Recent improvements in European and American financial indices, which have shown modest rebounds as international tariff negotiations advance, suggest Taiwan's Central Bank (中央銀行) will likely maintain current interest rate levels during its June monetary policy meeting rather than pursuing further tightening measures. ◼