Taiwan’s economy could manage to grow more than 2 percent this year even if shocks from the COVID-19 pandemic persist through the second quarter, as a government stimulus program would lend support, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
DGBAS Minister Chu Tzer-ming (朱澤民) made the assertion during a meeting of the Legislative Yuan’s Finance Committee, dismissing grimmer forecasts by other research institutes at home and abroad.
“If the COVID-19 outbreak lasts six months, the nation’s GDP growth would slow to 2.2 percent,” Chu said, weaker than a 2.37 percent increase the agency projected last month.
Photo: CNA
Lawmakers from across party lines voiced misgivings, citing international researcher IHS Markit Ltd, which on Tuesday halved Taiwan’s growth from 2.1 percent to 1 percent for this year as the coronavirus sweeps from China to Europe and the US.
The US is forecast to sink into a recession, while China is going through a steep slowdown, boding ill for Taiwan’s exports, they said.
Likewise, central bank Governor Yang Chin-long (楊金龍) last week said that the nation’s economy would have difficulty expanding more than 2 percent if the world fails to contain the disease in a timely fashion.
Chu said that he respected the different views, but added that other institutes have apparently failed to take into consideration the NT$100 billion (US$3.3 billion) of relief and stimulus measures the government is implementing to limit the damage caused by the coronavirus.
The government is to spend NT$60 billion shoring up industries most affected by the virus and has mobilized another NT$40 billion for similar ends, Chu said.
The NT$40 billion relief fund alone could bolster GDP readings by 0.37 percentage points, he said.
On the other hand, COVID-19 would take out 0.6 to 0.9 percentage points from the economy if it persists through June, he added.
Opposition lawmakers cited US President Donald Trump as saying that the outbreak would linger until August.
Chu said that such a scenario is extreme and outside of DGBAS assumptions, which are based on quarterly data.
The agency is to release advance readings for the first quarter on April 30, Chu said, adding that exports have fared quite strong, with a 9 percent annual increase in the first two months of this year.
Imports of capital equipment, a critical gauge of capacity expansion needs by local firms, also remained in positive territory, he said.
“Taiwan would likely see a slowdown, but it is not heading toward a recession,” Chu said, adding that investment interest among local firms remains healthy.
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