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Think tank raises Taiwan's GDP growth forecast for 2021 to 4.4%
 

03/27/2021

Taipei, March 27 (CNA) The Yuanta-Polaris Research Institute, one of the leading local economic think tanks, has raised its forecast of Taiwan's gross domestic product (GDP) growth for 2021 to 4.4 percent.

Yuanta-Polaris said Taiwan has been doing well in fighting the COVID-19 pandemic, paving the way for strong economic strength, while the global economy has been on a recovery as vaccination programs against the disease have kicked off in many countries.

Under such favorable circumstances, the think tank has upgraded Taiwan's GDP growth forecast for 2021 to 4.4 percent, up 1.3 percentage points from its previous estimate made in September 2020.

Despite the upgrade, the think tank's forecast was still shy of the government's predictions. The Directorate General of Budget, Accounting and Statistics forecast a 4.64 percent increase in late February, and the central bank put its forecast at 4.53 percent in mid-March.

Yuanta-Polaris said a strong cyclical recovery in the global economy on the back of massive financial stimulus measures is expected to offset to some extent a possible economic impact resulting from any waves of COVID-19 infection recurrences in the year.

According to the think tank, Taiwan's economy is expected to grow 6.05 percent, 6.84 percent, 2.77 percent, 2.35 percent, respectively, in the first, second, third and fourth quarter of this year.

Yuanta-Polaris has expected Taiwan's private investment will grow 4.07 percent in 2021, up from an earlier estimate of 2.50 percent, and capital formation will grow 3.66 percent, compared with an earlier forecast of 2.20 percent.

The think tank has also forecast Taiwan's exports of merchandise and services will grow 5.16 percent in 2021, up from an earlier expectation of 5.0 percent, while imports will grow 3.97 percent, compared with the previous forecast of 4.07 percent.

According to Yunata-Polaris, Taiwan's consumer price index is expected to grow 1.35 percent in 2021, compared with an earlier forecast of 0.90 percent.

Yuanta-Polaris President Liang Kuo-yuan (粱國源) said as the local economy will likely grow at such a fast pace, worries over the "five shortages" that the country has suffered for a long time are expected rise as well. The shortages refer to the country's lack of sufficient land, water, electricity, manpower, and talent.

Liang said as more Taiwanese firms with overseas operations return home to invest, a lack of water could impose an adverse impact on the local economy down the road.

Starting from April 6, some areas of Taichung, Miaoli, and Changhua city and counties will see a suspension of water supply for two days each week, in a government effort to deal with a severe drought in central Taiwan.

 

(By Pan Tzu-yu and Frances Huang)

 

Source: https://focustaiwan.tw/business/202103270005

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