Taiwan lowers 2022 GDP growth forecast, hit by COVID and inflation

TAIPEI, May 27 (Reuters) – Taiwan’s economy is likely to grow at a slower pace this year that initially forecast, the statistics office said on Friday, downgrading its outlook due to global inflation and COVID-19 dampening consumer demand at home and abroad.

The downward revision came even as the statistics office raised its export growth forecast for this year, with continued strong demand for the island’s technology products buoyed by 5G, electric vehicles and high end computing. Gross domestic product (GDP) is expected to rise 3.91% this year, the Directorate General of Budget, Accounting and Statistics said, down from 4.42% growth forecast in February.

That will be a slower pace than the 6.45% logged for 2021, which was the fastest rate in over a decade since it expanded 10.25% in 2010.

The directorate said Taiwan’s surge in COVID-19 infections and inflation driven by the war in Ukraine were affecting consumers, even as demand for semiconductors, the main plank of Taiwan’s economy, remained strong.

It said consumption at home will be “greatly” impacted by the spike in cases, leading to a 0.5-0.7% downward revision to growth this year.

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