The Rundown: GDP Forecasts, Infrastructure Plan, and Ransomware Attack

A weekly snapshot of Taiwan business news stories brought to you by CommonWealth and AmCham Taiwan’s TOPICS

Higher growth forecasts meet concerns of overheating

As the first quarter comes to a close, many economic institutions are raising their forecasts for Taiwan’s 2021 economic growth. On March 24, the Yuanta-Polaris Research Institute projected annual GDP growth of 4.4%, a sharp increase of 1.3 percentage points from its 3.1% forecast last September.

Yuanta-Polaris President Liang Kuo-yuan cited both domestic and international factors for Taiwan’s economic growth. Internationally, he said, most of the major global economic forecasts view the effects of the COVID-19 vaccine rollout in a positive light. Furthermore, fiscal and monetary incentives in various countries continue to be offered, and the global economy is expected to move toward recovery.

On the domestic front, apart from Taiwan’s excellent pandemic control, business figures for all sectors were good. Liang pointed out that manufactures are becoming more optimistic about their future operations, and all sectors continue to have a favorable outlook regarding Taiwan’s economic prospects.

Cathay Financial Holdings also increased their forecast for Taiwan’s 2021 economic growth rate to 4.2%, up from 3.2% last December. Hsu Chih-chiang, the head of an industry-academia collaboration between Cathay and National Taiwan University, noted that with the passing of U.S. President Joe Biden’s US$1.9 trillion relief bill and the U.S.’ ongoing vaccination campaign, economic recovery at home and abroad will become more evident post-pandemic. Furthermore, demand for semiconductors and components brought about by 5G and digitization, as well as the return of Taiwanese businesspeople and the continuing shifts in tech supply chains, will drive Taiwan’s economic growth.

However, in February the National Development Council’s (NDC) business climate monitor flashed red for the first time in over 10 years, raising concerns of economic overheating.

NDC Deputy Minister Kao Shien-Quey pointed out that when it comes to overheating, everyone tends to worry about bubbles in the stock and property markets, as well as about inflation. But she dismissed fears of a bubble, noting that the profits of companies listed on Taiwan’s stock market from last year to the first two months of 2021 have been good. Kao also said that as the overall foundation of the economy is solid, there is no bubble.

New NT$600 billion infrastructure plan unveiled

The government is expected to allocate NT$608 billion (US$21.3 billion) for public infrastructure projects this year, the highest amount for such projects in 14 years and the first time it has exceeded NT$600 billion, the NDC said in March. NDC Minister Kung Ming-hsin said that although some economic activities are still affected by the pandemic, the government’s substantial public infrastructure investment will not be interrupted.

The Ministry of Transportation and Communications (MOTC) and seven other ministries will increase spending by more than NT$3 billion this year for the overall project, which includes plans to acquire land for the Taoyuan Aerotropolis, special circular-economic zones, and the installation of air conditioning in schools.

The NDC also approved a five-year road infrastructure plan, under which the MOTC and the Ministry of the Interior will manage subsidies for Taiwan’s highways and urban roads, respectively. It is estimated that over the next six years, the ministries will invest NT$33 billion (US$1.2 billion) and NT$42 billion (US$1.5 billion), respectively, to optimize development of Taiwan’s transportation network.

Acer target of ransomware attack

According to a report on the online tech news outlet Bleeping Computer, a ransomware hacker group named REvil said it had hacked the Taiwanese computer giant Acer and released screenshots of the stolen material, demanding a ransom of NT$1.4 billion (US$50 million). The screenshots reveal leaked contents, including financial statements, account balances, and documents related to bank transactions.

Vitali Kremez, CEO and Chairman of cybersecurity company Advanced Intelligence, said that the hackers targeted Acer’s Microsoft Exchange server first, likely using the email system’s ProxyLogon vulnerability to gain access. If so, it would likely be first time a ransomware group used ProxyLogon to conduct a cyberattack.

Acer did not deny the alleged ransomware attack, saying that they had notified law enforcement and data protection authorities in several countries regarding the recent incident.

This edition was translated from the original Chinese by Austin Babb.

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