The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday trimmed its forecast for the nation’s GDP growth this year from 2.72 percent to 2.37 percent, as the COVID-19 outbreak in China has dealt a blow to Taiwan’s exports and private consumption.
The downward revision mainly reflects supply-chain disruptions and weaker consumer activity, which would slow the economy this quarter to a 1.8 percent increase, the weakest gain since the second quarter of 2016, the statistics agency said.
“Exports would bear the brunt as China accounts for 40 percent of Taiwanese exports,” DGBAS Minister Chu Tzer-ming (朱澤民) told a news conference in Taipei.
The outbreak is also interrupting operations of local firms based in China, but it could also hurt the larger market’s demand for electronics, Chu said, adding that poor visibility is limiting the accuracy of the agency’s projections.
International research bodies have not yet adjusted their growth forecasts to account for the outbreak, the DGBAS said.
The outbreak might dent the nation’s economy by between 0.35 percentage points and 0.5 percentage points this year, if it can be contained in three months, Chu said.
That would be less serious than the 2003 SARS outbreak that erased 0.57 percentage points from Taiwan’s GDP growth that year, he said.
Exports of goods and services are now expected to grow only 1.73 percent this year, down 0.96 percentage points from the previous estimate, after factoring in a sharp decline in tourist arrivals, Chu said.
To cope with the fallout of the outbreak, five-star hotels have been offering discounts and takeouts.
Upscale mall operator Breeze Group (微風集團) is reportedly reducing its staff by 30 percent, as visitors to Taipei’s Xinyi District (信義) have dropped by 70 percent, local Chinese-language media reported yesterday.
Private consumption, which accounts for more than 50 percent of GDP, is expected to squeeze a 0.75 percent increase this quarter and expand 1.58 percent this year, the DGBAS said.
The prediction suggests a downgrade of more than 50 percent from the agency’s earlier estimate.
The DGBAS reduced its forecast for this year’s private investment growth by 0.95 percentage points to 3.1 percent, after last year’s figure proved much stronger, with an increase of 9.61 percent from 7.61 percent.
DGBAS also revised down GDP growth for last year to 2.71 percent, 0.02 percentage points lower than data released last month.
The adjustment came after the economy grew 3.31 percent in the final quarter of last year, 0.07 percentage points softer than previously reported.
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