Taiwan’s economy is expected to remain healthy this year with GDP growth of 2.1 percent on the back of improving exports and stable domestic demand, but cross-strait relations could affect the tourism sector, Australia and New Zealand Banking Group Ltd (ANZ) said yesterday.
“Stable domestic demand, alongside robust external demand, underpins our positive outlook,” ANZ economists Bansi Madhavani and Raymond Yeung (楊宇霆) said in a report.
Madhavani and Yeung expect domestic demand to add 1.5 percentage points to Taiwan’s GDP this year, and external demand to contribute another 0.6 percentage points, the report showed.
Based on government data, exports are forecast to grow 1.9 percent this year, reversing a contraction of 1.4 percent, the report said.
Manufacturing surveys and production trends already pointed to an incipient recovery, ANZ said, adding that an ongoing revival of the semiconductor industry would benefit the export outlook and the domestic corporate sector.
Global semiconductor sales might register growth of 5.9 percent this year following a 12.8 percent decline last year, ANZ said.
Major local tech firms, such as Taiwan Semiconductor Manufacturing Co (台積電), have raised their capital expenditures to US$14 billion or more due to the increased market penetration rate expected from 5G-enabled smartphones, the report said.
Positive cyclical movements in the technology sector would allow exports and industrial production to stage a comeback in the first half of the year, and a sustained recovery would underpin momentum through the second half, it said.
US-China trade tensions have prompted production migration, which has realigned the electronics supply chain and enabled Taiwan to integrate more in Asia’s value chain, the report said. |
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