DBS Bank Ltd yesterday revised upward its forecast for Taiwan’s GDP growth this year to 1.8 percent, from the zero percent it predicted in August, in light of the nation’s better-than-expected economic gain of 3.3 percent last quarter, it said.
Taiwan’s rosy economic performance could be attributed to the nation’s strong exports, which were bolstered by rising demand for electronic products worldwide, while private consumption also returned to positive territory in the third quarter thanks to relaxing COVID-19 measures, DBS economist Ma Tieying (馬鐵英) said in a report.
DBS expects the economy to continue rallying in the fourth quarter, as more companies investing in digital transformation amid the pandemic worldwide would boost Taiwan’s semiconductor exports and manufactures, Ma said.
Photo: CNA
“We expect Taiwan’s economic recovery would to a square root symbol, instead of a V shape, as the fourth-quarter economy is likely to grow at a slower rate than the third quarter,” Ma said.
That is because the nation’s exports to Europe would likely be affected by new lockdown measures in the bloc, while exports to China would normalize after suppliers rushed to ship their products there before the US’ ban on Huawei took effect, she said.
Meanwhile, domestic demand would likely remain flat, as the employment market is not improving, she added.
DBS also raised its forecast for GDP growth next year to 4.2 percent, up from a previous estimate of 2.9 percent.
Taiwan, China and Vietnam are expected to be the three economies in Asia that report positive GDP growth this year, the bank said.
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