The Taiwan Institute of Economic Research (TIER) on Monday revised its forecast for Taiwan’s economic growth in 2021 to 6.1 percent, up 0.7 percentage points from its previous forecast in July.
The upward revision came despite weakness in domestic demand following a COVID-19 surge in May and resulted from strong private investment and rising export orders as economic activity in the United States, China and Europe gradually recovers, the economic think tank said.
Taiwan’s strong export growth has been keyed by the semiconductor sector, TIER researcher Liu Pei-chen (劉佩真) said.
Semiconductor foundries have been able to repeatedly increase the prices of their 8-inch wafers, contributing to an estimated 18.3 percent growth in their output value this year, Liu said, and the industry should see a pattern of steady growth in 2022.
Another contributing factor to the revised growth forecast was strong strong returns in the domestic financial sector, which have been helped by quantitative easing campaigns adopted by central banks around the world, the TIER said.
As for inflation concerns, TIER President Chang Chien-yi (張建一) said the recent spike in the consumer price index was mainly driven by rising imported energy prices, but he still believed that there will not be a huge uptick in inflation in Taiwan.
Chang expected commodity prices to gradually decline in the future as bottlenecks in the global supply chain were dealt with.
The TIER also remained bullish on Taiwan’s economy next year, and it forecast economic growth in 2022 at 4.1 percent because of continued strong private investment and export growth.
Source: Focus Taiwan News Channel