DGBAS cuts GDP forecast to 1.67%
Taiwan’s Directorate General for Budgeting Accounting and Statistics (DGBAS) has revised its 2020 GDP forecast downwards by 0.7 percentage points to 1.67% to take into account the impact of the coronavirus pandemic. According to an official press release, sent out today, while the pandemic has caused a severe impact on economic activities around the world, Taiwan’s export-related manufacturing activities have been less affected since Taiwan has not had to impose curfew or lock-down measures so far. Moreover, “the dominance in semiconductor manufacturing industry and the emerging demand for new technological applications, such as 5G, internet of things (IOT) and artificial intelligence, as well as the capacity expansion of manufacturing reshoring, support Taiwan’s export growth.”
The DGBAS expects that real exports of goods and services will contract 0.70% and real private consumption will contract 0.24%, mainly owing to the impact of the pandemic, although weak consumer spending will be partly offset by the government’s relief and stimulus measures, emerging e-commerce, food delivery services, and other “stay-at-home demand”.
According to the DGBAS, real private fixed capital formation is forecast to grow by 2.31%, supported by the continuing investment of the semiconductor industry, 5G network construction, offshore wind energy and reshoring investment by Taiwan’s overseas companies.