Taiwan upgrades 2021 GDP growth forecast to 4.64% (update)

02/20/2021 08:33 PM
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CNA photo. Feb. 20, 2020
CNA photo. Feb. 20, 2020

Taipei, Feb. 20 (CNA) The Directorate General of Budget, Accounting and Statistics (DGBAS) on Saturday said that it has raised its forecast for Taiwan's gross domestic product (GDP) growth for 2021 to 4.64 percent.

The latest forecast is an upgrade of 0.81 percentage points from the previous DGBAS estimate of 3.83 percent made in November.

If the real growth matches the forecast, Taiwan's 2021 GDP growth will hit a new high since 2014, when the country's economy grew 4.72 percent.

In addition, the DGBAS said Taiwan's GDP for 2020 rose 3.11 percent in 2020, beating an earlier reading of 2.98 percent released in January.

The DGBAS said the upgrade of the 2021 GDP growth forecast largely came after a more upbeat mood about Taiwan's exports, as the country's electronics industry is expected to get a boost from solid global demand for emerging applications.

The semiconductor business, in particular, will continue to benefit from an increase of shipments catering to 5G applications, high-performance computing devices, automotive electronics and the Internet of Things, the DGBAS said.

As a result, the DGBAS said, it has raised its forecast for Taiwan's exports of merchandise and services to 5.05 percent for 2021, an upgrade of 1.67 percentage points from its previous estimate.

On the back of rising raw material prices and an expansion in domestic demand, Taiwan's imports of merchandise and services are expected to grow 3.76 percent in 2021, up 0.40 percentage points from the previous forecast, the DGBAS said.

The DGBAS said that with semiconductor firms keen to expand capacity and upgrade technology, as well as more and more Taiwanese investors willing to return home to invest, Taiwan's private investment is expected to grow 3.91 percent in 2021, up 0.23 percentage points from the previous forecast.

In addition, capital formation for 2021 is expected to grow 3.50 percent, an upgrade of 0.31 percentage points from the earlier estimate.

However, the DGBAS has lowered its forecast for Taiwan's private consumption growth by 0.30 percentage points to 3.74 percent, taking into account worries over the COVID-19 pandemic, which has affected consumers' willingness to spend.

The DGBAS said consumer prices for 2021 are expected to grow 1.33 percent in 2021, up 0.17 percentage points from the previous estimate.

According to the DGBAS, Taiwan's GDP is expected to grow 6.20 percent, 7.16 percent, 3.19 percent and 2.44 percent, respectively, in the first, second, third and fourth quarters of this year.

Commenting on the 2020 economy, the stronger growth for the entire year came after the GDP rose 5.09 percent in the fourth quarter, an upgrade of 0.15 percentage points from the earlier reading, and the third-quarter growth was revised to 4.26 percent from 3.92 percent, the DGBAS said.

Despite the significant growth upgrade in 2021, the DGBAS cautioned that the COVID-19 pandemic could continue to impose uncertainty on the global economy, while a spike in crude oil and raw material prices, possible volatility in global financial markets as well as lingering tension between the United States and China, could affect the pace of global economic recovery.

(By Pan Tzu-yu and Frances Huang)

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