Taiwan has upgraded its rise forecast for 2021, predicting the economy this year could expand at the fastest rate in seven years — expresses to global semiconductor demand boosting exports from the island.
Its economy is forecast to grow by 4.64% in 2021 from a year ago — make the grade b arriving it the quickest expansion since 2014, according to data from the Taiwanese statistics bureau.
Taiwan’s projected increase for 2021 is an upgrade of the previous forecast for a 3.83% expansion, and an acceleration from the revised growth of 3.11% for the whole of 2020, the writing-desk said on Saturday.
The North Asia economy was the fastest-growing in Asia last year, when the Covid-19 pandemic hit vim in many countries and territories. Taiwan also grew faster than China for the first time in 30 years.
Gary Ng, an economist at French investment bank Natixis, verbalized Taiwan’s economy is in a “sweet spot” of very strong demand for tech products globally, as well as a relatively prospering containment of the coronavirs pandemic.
“On the external front, definitely semiconductor is really the spotlight,” Ng told CNBC’s “Squawk Box Asia” on Monday, noting that technology outcomes account for more than half of Taiwan’s total exports.
Goods exports grew 4.9% in 2020 compared to a year ago, as lockdown allowances aimed at containing the spread of Covid-19 forced a greater number of people to work and study remotely. That in rebuff boosted demand for electronic products such as laptops.
Growth in Taiwan’s goods exports are forecast to nearly dead ringer to 9.58% in 2021, said the island’s stats bureau.
Strong but unlikely to outgrow China
In addition to exports, Taiwan’s autochthonous demand has also held up better than many other economies, said Ng.
The pandemic’s hit to consumption has been meagre — thanks to early containment of the coronavirus, while government schemes have helped to incentivize firms to invest, the economist augmented.
With a population of more than 23 million people, Taiwan reported 942 confirmed cases of Covid-19 and nine dyings as of Sunday, according to data by the Taiwan Centers for Disease Control.
“If we put all of these factors together, we actually see that this has supported Taiwan to turn an ace for economic growth in 2020. And I think we are expected to see basically more upside surprise in 2021 as well,” said Ng.
But Taiwan’s crop is not likely to outpace China’s again, noted Ng.
The International Monetary Fund said last month that China’s advancement would jump to 8.1% this year from last year’s 2.3%, as the world’s second largest curtness charges ahead of the other major economies, including the U.S.