Published Date: 2021-07-23
The Taiwan
Institute of Economic Research has announced Friday that it now predicts
Taiwan’s economy will grow 5.4% in 2021. That’s up 0.37 percentage points from
the institute’s previous prediction, made in April.
A notable increase
in Taiwan’s exports is the main reason for the revised figure. According to
institute director Chang Chien-yi, the gradual relaxation of COVID-19
pandemic-related measures worldwide has helped stimulate demand, leading to
growth in Taiwanese exports that has exceeded expectations. The institute now
predicts that Taiwan’s exports will increase by 19.77% this year, 9.54
percentage points higher than its previous prediction.
Strong export
performance has in turn stimulated domestic investment. Private investment in
the semiconductor industry is expanding in particular, spurred on by
manufacturers’ current inability to meet demand. In addition, Taiwanese
businesses bringing back their overseas operations are continuing their
domestic investment.
However, COVID-19
has seen private spending shrink as people avoid going out. Therefore, the
institute now only expects private spending to grow 2.84% this year, 1.51
percentage points less than it previously predicted. The institute does however
say that with the pandemic now under control in Taiwan, there is a chance for a
rebound in spending in the second half of the year.