The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) has adjusted upward its forecast for economic growth for this year and next year, with the strength in exports this year giving way to stronger domestic demand next year.
CIER yesterday forecast that the economy would grow 2.38 percent this year and 3.73 percent next year, up from its October estimates of 1.76 percent and 3.42 percent respectively.
The economy hit bottom in the second quarter, when it was dragged down by the impact of the COVID-19 pandemic, but with the spread of the virus under control in Taiwan, the domestic economy gradually recovered in the third quarter and is set to register a “V-shaped” recovery, CIER vice president Wang Jiann-chyuan (王健全) said.
Photo: Wu Jia-ying, Taipei Times
The economy’s higher-than-expected growth this year would largely be driven by robust exports, but the main engine of growth next year would shift to robust domestic demand and consumption, Wang said.
However, attention should be paid to several trends expected to emerge in the post-pandemic era, such as “deglobalization” (encouraging investment and manufacturing closer to the target market), “debureaucraticization” (strengthening public governance and efficiency), and a more dominant digital economy, he said.
At the same time, Taiwan should try to assist its companies in upgrading their operations and rebuilding their supply chains to align with global trends, helping to make businesses the pillars of the domestic economy, Wang said.
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