A surge in COVID-19 cases in India is expected to slow global economic recovery, DBS Bank Ltd (星展銀行) said yesterday, while maintaining its GDP growth forecast for Taiwan at 5 percent this year.
Taiwan reported stronger-than-expected 8.16 percent growth in GDP in the first quarter, beating the Singaporean bank’s 6.1 percent prediction from late March.
“If we judge solely by first-quarter economic growth, we can expect Taiwan’s whole-year GDP growth to climb to a range from between 6 to 7 percent,” Singapore-based DBS economist Ma Tieying (馬鐵英) said in a statement.
Photo: Lee Chin-hui, Taipei Times
“However, in light of the risks of further viral spread in India, we will keep our projection for Taiwan’s economy at 5 percent for the time being,” Ma said.
India only accounts for 1 percent of Taiwan’s total exports and imports value, DBS said, adding that it has a limited-size financial market and does not occupy a significant role in the global manufacturing network.
However, India’s sharp spike in COVID-19 infections could still take a toll on the global economic rebound, Ma said.
If the Indian variant is transmitted widely to other counties, it could weaken the efficacy of COVID-19 vaccines and lead to reinstating strict prevention measures, such as social distancing requirements and lockdowns, she said.
The variant, called B.1.617, was first detected in India in December last year and has been found in at least 17 countries, including Singapore, the UK and the US, the WHO said in its weekly update last week.
The variant has a higher growth rate than other variants in India, indicating potential for increased transmissibility, the WHO said.
Regarding Taiwan’s economy, Ma said the nation’s recovery has been “at full speed,” with GDP expanding quarter-on-quarter for three consecutive quarters.
Exports advanced at a double-digit percentage increase last quarter, the first time over the past decade, while the growth of private consumption rebounded into positive territory for the first time since the COVID-19 pandemic began, she added.
Taiwan’s export momentum is expected to continue over the next few quarters on the back of ongoing vaccinations worldwide, easing border controls and a recovering global economy, while rising exports would help private investment expand and improve the local labor market, Ma said.
Taiwan’s inflation is forecast to grow 1.5 percent this year, DBS said.
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