CIER raises forecast for GDP growth in Taiwan in 2020, 2021

Taipei, Dec. 18 (CNA) The Chung-Hua Institution for Economic Research (CIER) has adjusted its forecast for Taiwan's economic growth rates for 2020 and 2021, with the strength seen in exports this year giving way to stronger domestic demand next year.

According to the CIER's latest forecast issued Friday, Taiwan's gross domestic product (GDP) will grow 2.38 percent in 2020 and 3.73 percent in 2021, up from the CIER's previous estimates of 1.76 percent and 3.42 percent growth, respectively, made in October.

CIER Vice President Wang Jiann-chyuan (王健全) said Taiwan's economy hit bottom in the second quarter when it was dragged down by the impact of the COVID-19 pandemic that broke out at the end of 2019.

But with the spread of the coronavirus under control in Taiwan, the domestic economy, gradually recovered from the fallout of the pandemic starting in the third quarter, is set to register a V-shape recovery, Wang said.

Taiwan's higher-than-expected growth this year will largely be driven by robust exports, but the main engine of growth in 2021 will shift to strong domestic demand and consumption, Wang said.

He cautioned, however, that attention should be paid to several trends expected to emerge in the post-COVID-19 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.

At the same time, Taiwan should try to assist its companies in upgrading their operations and rebuild their supply chains to align with global trends and help returning Taiwanese businesses become pillars of the domestic economy, Wang urged.