IMF raises Taiwan's GDP growth forecast for 2020

Taipei, Oct. 13 (CNA) The International Monetary Fund (IMF) on Tuesday raised its forecast for Taiwan's gross domestic product (GDP) for 2020, as the country is doing better than most other countries at fighting the COVID-19 pandemic.

According to the IMF, Taiwan's GDP growth for 2020 is expected to stand at zero, a significant upgrade from a 4 percent contraction forecast by the organization in April.

The IMF said that with the global economy gradually moving away from the impact resulting from COVID-19, Taiwan's economy is expected to recover in 2021 and grow 3.2 percent, compared with an earlier estimate of a 3.5 percent increase.

However, Kung Ming-hsin (龔明鑫), minister of the National Development Council (NDC), said Taiwan's economic strength has been undervalued by the IMF despite the upgrade.

"The IMF appeared too cautious about Taiwan's economy," Kung said.

In April, the Directorate General of Budget, Accounting and Statistics (DGBAS) forecast that Taiwan's economy will grow 1.56 percent in 2020 and grow further to 3.92 percent in 2021.

Citing data released by the DGBAS, Kung said Taiwan's economy grew 0.78 percent in the first half of this year and momentum accelerated in the third quarter on the back of an increase in industrial production and exports, as well as improvements in retail sales and the food/beverage sector.

In addition to Taiwan's superior efforts in combating the COVID-19 pandemic, Kung said, government stimulus measures have also served as a driver to economic growth.

Kung added that the local electronics sector has also benefited from the globally booming "stay at home economy," which has boosted demand for tech devices, much to Taiwan's advantage.

"Under such favorable circumstances, Taiwan's GDP growth is expected to top the IMF's forecast for 2020," Kung said. "It is unlikely that we will see only zero economic growth."

"The IMF's upgrade is not enough for Taiwan and the country's economy deserves more study by the IMF," he added.

According to the IMF, the global economy is expected to contract by 4.4 percent in 2020, compared with an earlier forecast of a 4.9 percent contraction. In 2021, the IMF said, the world's economy is expected to grow 5.2 percent.