CIER cuts 2020 GDP forecast to 1.03%
By ECCT staff writers
The Chung-Hua Institution for Economic Research (CIER) has cut its forecast for Taiwan's gross domestic product (GDP) for 2020 to 1.03% to account for the impact of the coronavirus pandemic. The revision comes just days after the International Monetary Fund (IMF) announced much more aggressive downgrades to its global forecasts, including -4% for Taiwan.
According to CIER’s announcement published by CNA, Taiwan's GDP is expected to grow 1.83% in the first quarter, contract by 0.12% in the second quarter, and then grow 0.52% in the third quarter and 1.86% in the fourth quarter.
CIER said the virus's economic effect in the first quarter seemed to be relatively mild as Taiwan's export growth remained in positive territory and consumer prices moved lower, helping overall growth remain above zero during the period
The second quarter is more likely to feel the impact, however, after the contagion escalated in the United States and Europe in March, leading to massive lockdowns that have sent demand plunging and hurt Taiwan's export-oriented economy.
GDP growth will also likely be hurt in the quarter by local consumers staying at home and limiting their spending, the think tank said.
Weaker domestic demand is expected to undermine the tourism, food/beverage and airline sectors and increase the number of workers put on furlough, according to CIER.